Investors continue to embrace dividend exchange traded funds. That devotion is highlighted by the over $8 billion that has flowed into dividend ETFs this year.
Increasingly popular are those ETFs that emphasize, through various methodologies, dividend growth. That is certainly a positive trait. From 1972 through 2012 companies that initiated or consistently raised dividends outperformed and were less volatile than the companies either did not pay, cut or kept dividends stagnant, according to Ned Davis Research.
There is also something to be said for capturing payouts on basis that is more regular than quarterly. Say monthly. As we noted earlier this year, there are some equity-based ETFs (nearly all bond funds deliver distributions monthly) that deliver monthly dividends. [ETFs for Monthly Dividend Hunters]
There is more to the monthly dividend case than merely getting 12 payouts per year as opposed to four. Although there evidence does not suggest monthly dividend ETFs yield more than their quarterly counterparts, the monthly advantage shines through via increased compounding for investors opting for dividend reinvestment. That creates return advantages for some monthly dividend ETFs over time relative to their quarterly-paying rivals.
With that, we’ve unearthed more common stock monthly dividend ETFs for consideration by income investors. Let’s get started with the…