Guess which ASX ETF pays dividends every month?

ETF spelt out on cube blocks with rising arrows.ETF spelt out on cube blocks with rising arrows.

ASX exchange-traded funds (ETFs) offer a one-step process to diversify your stock holdings. 

Most ASX ETFs hold a sizeable basket of different shares. Or in some cases bonds or even cryptos.

ETFs have also gained in popularity among income investors seeking a simpler way to access dividends without having to research dozens of companies themselves.

While the majority of listed companies only pay out dividends once or twice per year, a few ASX ETFs make their distribution payments every month. A handy feature for income investors keen to access the dividends in a timely fashion.

This ASX ETF offers monthly dividend payments

Among the funds paying monthly distributions is Betashares Australian Dividend Harvester Fund (ASX: HVST).

HVST aims to offer investors mostly franked, passive income that beats the net income yield of the wider ASX.

The ETF provides instant diversity, holding 40 to 60 different shares. The portfolio is rebalanced every three months with the goal of providing the highest gross yield outcome.

Its top holdings by sector are in the financials sector (30%), the materials sector (25%) and the healthcare sector (10%).

As at 31 January, its two biggest shareholdings were BHP Group Ltd (ASX: BHP) at 13.2% and Commonwealth Bank of Australia (ASX: CBA) at 10%.

The ASX ETF’s 12-month distribution yield works out to 7.2%. The fund’s gross distribution yield over the 12 months was 10.1%, at an average franking level of 93%.  

HVST’s most recent monthly dividend of 7.1 cents per share will be paid out next Thursday, 16 March, with a 78% franking level.

Just as with any share trading on the ASX, the ETF’s returns will also be impacted by its share price when an investor opts to sell.

As you can see in the chart above, the HVST share price is up 4% in 2023 and down 3% over the past 12 months.

The post Guess which ASX ETF pays dividends every month? appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia

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