Monthly-Paying ETFs With Double-Digit Yields: Which Should Be on Your Radar?

The investment landscape has shifted dramatically in recent years. While traditional dividend seekers once waited three months between payouts, a new wave of ETFs now delivers monthly distributions. If you’re hunting for consistent income streams exceeding 10% annually, here’s what you need to know about five strong contenders.

The Highest-Yielding Option: Global X SuperDividend ETF (SDIV)

SDIV stands out with a commanding 12.8% yield—the highest among these five monthly-dividend payers. However, here’s the catch: this fund diverges from the covered call strategy used by competitors. Instead, it cherry-picks 100 of the world’s highest-dividend-paying stocks globally.

Sounds promising in theory, but the reality tells a different story. SDIV has posted negative total returns over the past year, three years, five years, and even the past decade—despite those generous monthly payouts. The lesson here? High dividend yields sometimes signal distressed companies or secular decline, not opportunity. Combined with a 0.58% expense ratio, SDIV appears less attractive despite its headline-grabbing yield.

The Tech-Heavy Play: JPMorgan Nasdaq Equity Premium Income ETF (JEPQ)

JEPQ delivers an 11.7% yield while targeting the Nasdaq 100, making it the go-to choice for technology stock exposure with monthly income. Like its JPMorgan sibling JEPI, JEPQ employs covered call strategies to generate that income stream.

Year-to-date performance has been stellar—28.2% total return—though it trails the Nasdaq itself (up 32.0%). The 0.35% expense ratio matches JEPI’s, making it competitively priced. Still, JEPQ launched only in 2022, so long-term performance data remains limited. What’s clear: this ETF lets you ride the tech rally while collecting substantial monthly dividends.

The Established Leader: Global X NASDAQ 100 Covered Call ETF (QYLD)

QYLD has paid monthly dividends for nine consecutive years—a rock-solid track record. Its 11.5% yield sits between JEPQ and JEPI. However, this older ETF (launched 2013) reveals an important truth about covered call strategies: while they generate consistent income, they often cap upside potential.

Over three years, QYLD returned just 6.5% annualized; five-year returns hit 5.7%—both significantly trailing the Nasdaq. The 0.60% expense ratio is reasonable but higher than the top JPMorgan options. QYLD works for income-focused investors, but it’s not a growth engine. This fund suits conservative portfolios rather than growth-oriented ones.

The Diversified Alternative: NEOS S&P 500 High Income ETF (SPYI)

SPYI offers an intriguing middle ground. Launched August 2022, it holds 505 S&P 500 stocks—exceptional diversification—while delivering a 10.7% yield. Year-to-date performance of 17% actually beats JEPI so far in 2023.

The downside? A 0.68% expense ratio nearly doubles what JEPI and JEPQ charge. Over three years, that difference compounds: a $10,000 investment would cost $113 in JEPI fees versus $218 with SPYI. Still, its emerging track record and broad diversification make it worth monitoring, especially for investors comfortable with higher fees for greater stock-level diversification.

The Market Darling: JPMorgan Equity Premium Income ETF (JEPI)

JEPI is the kingpin of monthly-dividend ETFs. In just three years, it accumulated $29 billion in assets, becoming the world’s largest actively-managed ETF. It currently yields just above 10%, and for good reason: it’s become the default choice for monthly-dividend seekers.

JEPI invests in large-cap U.S. stocks while selling covered calls to generate premium income. The result: broad diversification across 118 stocks (top 10 holdings represent only 17.5% of assets) plus reliable monthly payouts. The 0.35% expense ratio is reasonable compared to competitors.

However, this approach has a cost. JEPI’s 7.3% year-to-date return lags the broad market (VOO’s 20.6%), though its three-year annualized return of 11.5% is more respectable. The covered call strategy caps your upside when markets rally strongly. For balanced portfolios seeking steady income without chasing maximum growth, JEPI remains hard to beat.

The Strategic Takeaway

Monthly-dividend ETFs offer genuine appeal for income investors, but they’re not miracle workers. All come with tradeoffs—primarily the income-versus-growth tension inherent in covered call strategies.

JEPI and JEPQ emerge as the strongest options: both feature lower expense ratios (0.35%), solid performance, and JPMorgan’s operational expertise. JEPI suits broad market exposure, while JEPQ targets tech investors.

SPYI warrants attention if you prioritize diversification and accept higher fees. QYLD works for conservative income seekers but won’t excite growth investors. SDIV should likely remain on the sidelines—its long-term negative returns despite high yields send a clear warning signal.

The bottom line: incorporate these monthly-dividend payers as income components in a balanced strategy, not as portfolio anchors. They excel at generating cash flow; they’re not designed to maximize capital appreciation.