Monthly Dividend ETFs: The Complete Income Investor's Guide
Monthly dividend ETFs have exploded in popularity. The appeal is obvious: regular cash flow that aligns with your monthly bills. But not all monthly payers are created equal—some deliver sustainable income, others are yield traps waiting to blow up your portfolio.
This guide covers the five most popular monthly dividend options: JEPI, JEPQ, DIVO, QYLD, and MAIN. We'll break down how each works, the risks involved, and which ones actually deserve a spot in your portfolio.
Monthly Dividend ETFs at a Glance
CC = Covered Call, ELN = Equity-Linked Notes, BDC = Business Development Company
JEPI: The Balanced Income Choice
~7-8% YieldJPMorgan Equity Premium Income ETF has become the poster child for monthly income investing. It holds low-volatility S&P 500 stocks and sells equity-linked notes (ELNs) to generate premium income.
Pros
- Defensive stock selection reduces volatility
- $35B+ AUM provides excellent liquidity
- Outperformed in 2022 bear market
- Tax-efficient ELN structure
Cons
- Lags in strong bull markets
- Yield varies with market volatility
- Complex underlying strategy
- 0.35% expense ratio
JEPQ: Higher Yield, Higher Stakes
~9-11% YieldJPMorgan Nasdaq Equity Premium Income ETF applies the same strategy as JEPI but to the Nasdaq 100. More tech exposure means higher volatility—and higher option premiums.
Pros
- Highest yield among JPMorgan income ETFs
- Tech sector exposure for growth potential
- Benefits from Nasdaq volatility
- Rapidly growing AUM (~$18B)
Cons
- Higher drawdowns in bear markets
- Concentrated in tech sector
- Shorter track record (since 2022)
- More volatile income stream
DIVO: The Quality-Focused Option
~4-5% YieldAmplify CWP Enhanced Dividend Income ETF takes a different approach. It holds high-quality dividend growth stocks and only selectively sells covered calls—preserving more upside potential.
Pros
- Dividend growth stock foundation
- Selective covered calls preserve upside
- Lower volatility than JEPI/JEPQ
- Better total return potential
Cons
- Lower current yield (~4-5%)
- Higher expense ratio (0.55%)
- Smaller AUM (~$3B)
- Less income in sideways markets
QYLD: Maximum Yield, Maximum Trade-offs
~11-12% YieldGlobal X NASDAQ 100 Covered Call ETF goes all-in on income. It sells covered calls on 100% of its Nasdaq 100 holdings, extracting maximum premium—but giving up virtually all upside potential.
Pros
- Highest yield among covered call ETFs
- Consistent monthly distributions
- Long track record (since 2013)
- Lower expense ratio (0.60%)
Cons
- Zero upside capture potential
- NAV erosion over time possible
- Full downside exposure
- Distributions may include ROC
MAIN: The BDC Alternative
~6-7% YieldMain Street Capital Corporation isn't an ETF—it's a Business Development Company (BDC) that lends money to middle-market companies. It offers a different risk/reward profile than covered call strategies.
Pros
- Diversified income source (not equity-based)
- Monthly + special dividends
- Internally managed (lower conflicts)
- Strong track record of dividend growth
Cons
- Credit risk to underlying loans
- Interest rate sensitive
- Single company risk (not diversified)
- More volatile than ETFs
Which Strategy Fits Your Goals?
🎯 Maximum Current Income
QYLD → JEPQ → JEPI
Higher yield = higher risk⚖️ Balanced Income + Growth
DIVO → JEPI
Moderate yield, better total return🛡️ Defensive Income
JEPI → DIVO
Lower volatility, steadier income🔀 Diversified Approach
JEPI + MAIN or JEPI + DIVO
Different income sourcesSample Portfolio Allocations
Conservative Income
Lower volatility, moderate yield (~5-6%)
Aggressive Income
Higher yield (~9-10%), more volatility
Diversified Income
Equity + credit exposure (~7-8%)
The Bottom Line
Monthly dividend ETFs are powerful income tools, but they're not magic. Every high yield comes with trade-offs—whether it's capped upside, credit risk, or NAV erosion potential.
For most investors, a core position in JEPI or JEPQ, supplemented by DIVO for quality or MAIN for diversification, provides the best risk-adjusted monthly income stream.
Calculate Your Monthly Income
Use our calculators to see exactly how much monthly income you could generate from each ETF.