Many investors need dependable passive income, and one outstanding way to get reliable regular dividends is to invest in exchange-traded funds or ETFs.
Unlike open-end mutual funds, ETFs trade on major exchanges like stocks do. ETFs own financial assets such as stocks, bonds, currencies, debts, futures contracts, and commodities such as gold bars.
One massive advantage to them is that they can be sold anytime when the markets are trading. We screened our 24/7 Wall St. ETF research database and found 6 top funds that have these qualities:
- High dividend payout
- Trades at or at a discount to net asset value
- Are managed by major Wall Street firms
- Reasonable expense ratio
The six top funds hit our screens and make sense for investors looking for dependable, often monthly instead of quarterly distributions.
JPMorgan Equity Premium Income (NYSEArca: JEPI)
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This gigantic fund has taken in billions since its inception in 2020 and is run by top portfolio managers at JPMorgan. The fund seeks to achieve this objective by (1) creating an actively managed portfolio of equity securities comprised significantly of those included in the fund’s primary benchmark, the Standard & Poor’s 500 Total Return Index (S&P 500 Index) and (2) through equity-linked notes (ELNs), selling call options with exposure to the S&P 500 Index.
Dividend yield = 8.40% paid monthly
NAV = $55.17
Expense ratio = 0.35%
Alerian Master Limited Partnership (NYSEArca: AMLP)
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This is an excellent way for investors to have energy exposure, as this fund will typically invest at least 90% of its total assets in securities that comprise the underlying index. The underlying index includes energy infrastructure MLPs that earn most of their cash flow from transporting, storing, and processing energy commodities.
Another plus is unlike individual MLP stocks, which send a K-1 for tax purposes and can be a hassle, this fund sends investors a 1099.
Dividend yield = 7.85% paid quarterly
NAV = $42.92
Expense ratio = 0.85%
Global X U.S. Preferred ETF (NYSEArca: PFFD)
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This fund focuses on preferred stocks of top U.S. companies. The fund invests at least 80% of its total assets in the securities of its underlying index. It also supports at least 80% of its assets in preferred domestic securities, principally traded in or whose revenues are primarily from the U.S. The underlying index tracks the broad-based performance of the U.S. chosen securities market.
Dividend yield = 7.11% paid monthly
NAV = $19.60
Expense ratio = 0.23%
Global X SuperDividend REIT ETF (NASDAQ: SRET)
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Like the MLP fund with energy, this fund gives investors exposure to real estate with at least 80% of its total assets in the securities of the underlying index and American Depositary Receipts and Global Depositary Receipts based on the securities in the underlying index. The underlying index tracks the performance of REITs that rank among the highest-yielding REITs globally.
Dividend Yield = 7.19% paid monthly
NAV = $21.96
Expense ratio = 0.59%
iShares National Muni Bond ETF (NYSEArca: MUB)
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While much lower in yield, this is a perfect fund for investors seeking tax-free income. The underlying index includes municipal bonds, the interest of which is exempt from Federal income taxes and not subject to the alternative minimum tax.
Dividend Yield = 2.65% paid monthly.
NAV = $108.29
Expense ratio = 0.07%
Vanguard High Dividend Yield Index Fund (NYSEArca: VYM)
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This is a perfect income ETF for more conservative investors. The manager employs an indexing investment approach designed to track the index’s performance, consisting of common stocks of companies that generally pay higher than average dividends. The adviser attempts to replicate the target index by investing all, or substantially all, of the fund’s assets in the stocks that make up the index.
Dividend Yield = 3.12% paid quarterly
NAV = $106.66
Expense ratio = 0.08%
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