For better or for worse, it is the norm here on the ASX for dividend shares to give their investors passive income every six months.
Almost without fail, every blue-chip dividend share on the share market, whether that be Commonwealth Bank of Australia (ASX: CBA), BHP Group Ltd (ASX: BHP), Woolworths Group Ltd (ASX: WOW), or Telstra Group Ltd (ASX: TLS), follows this bi-annual dividend model.
But there are some exceptions. Some ASX shares, like Rural Funds Group (ASX: RFF), pay out dividends every quarter. Likewise, most exchange-traded funds (ETFs) also give their investors a paycheque every three months.
But finding monthly dividend payers? These ASX shares are the white tigers of the ASX – you hardly ever find one in the wild. Luckily for those income hunters out there, the search is over. We've found three that will send a shareholder payment to investors 12 times a year.
Image source: Getty Images
3 ASX shares that pay dividends monthly
BetaShares Australian Dividend Harvester Fund (ASX: HVST)
This exchange-traded fund from provider BetaShares is our first monthly dividend payer to look at. This ETF is an income-focused one at its core. It's structured in a way that allows the fund to exceed the average income that the broader ASX can offer.
It does this by using a 'harvesting' strategy of buying large-cap ASX 200 dividend shares when they are about to trade ex-dividend, selling afterwards, and cycling to the next dividend share.
In this way, this ETF is able to fund oversized dividend payments, typically with franking credits attached, which are distributed to investors every month.
Metrics Master Income Trust (ASX: MXT)
This investment is a listed investment trust (LIT), which functions in a similar manner to an ETF. The Metrics Master Income Trust invests in corporate debt instruments and loans. This is an asset class that most ordinary investors don't have exposure to.
It targets a return of 3.25% per annum above the Reserve Bank of Australia's cash rate, while prioritising capital stability and regular income.
That regular income comes in the form of monthly dividends. But since these payments are funded by loan interest and not from corporate dividends, the distributions from Metrics Master Income Trust don't come franked.
Plato Income Maximiser Ltd (ASX: PL8)
Finally, let's discuss a listed investment company (LIC) in Plato Income Maximiser. A LIC is basically a company that holds shares in other companies. In this case, Plato holds a diversified portfolio of high-yield ASX dividend shares.
These typically include names like National Australia Bank Ltd (ASX: NAB), Wesfarmers Ltd (ASX: WES), and Woodside Energy Group Ltd (ASX: WDS).
As you might guess, Plato Income Maximiser also pays its investors monthly dividends. These usually come fully franked too.
Foolish takeaway
So as you can see, the ASX does have several investments available for consideration if receiving monthly dividend paycheques is important for your investing strategy. Remember, monthly dividends don't always equate to market-beating returns.
And it's also important to consider what fees you are paying for the privilege of getting that monthly paycheque. But monthly dividend income is certainly available on the ASX share market for those willing to partake.
