ASX investors like shares and exchange-traded funds (ETFs) that pay out dividends on a monthly basis. Here on the ASX, it is the norm to pay out just two dividends per year. That is rather unusual by international standards, where quarterly dividend payments are far more common.
As a result, the vast majority of ASX dividend shares follow that biannual schedule when it comes to their dividend payments to shareholders. A small minority opt for quarterly dividends. An even smaller number still pay 12 dividends per year. Yet, monthly dividend payers are very popular on the ASX. Given that frequency of income distributions, it's not hard to understand why.
We've covered a number of the ASX's monthly dividend payers, both stocks and ETFs, here at The Motley Fool Australia over the past 12 months. These include Plato Income Maximiser Ltd (ASX: PL8), Metrics Master Income Trust (ASX: MXT), and the BetaShares S&P Australian Shares High Yield ETF (ASX: HYLD).
But this week, we have a new monthly dividend ETF to welcome to the Australian share market.
It is none other than the VanEck Cash Plus Active ETF (ASX: MONY).
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A new ASX ETF that will pay a monthly dividend
This new ASX exchange-traded fund from VanEck, unlike most ETFs on the share market, does not invest in an underlying portfolio of other stocks. Instead, it, according to the provider, targets "yield opportunities across different cash, cash-like instruments and short duration credit, issuers and individual securities".
In simpler terms, this ETF invests in a portfolio of fixed-interest investments like bonds to generate reliable income for its investors. These investments average a credit rating of 'A+', and are sourced from respectable financial institutions. These include the Royal Bank of Canada, Spain's Banco Santander. Our own ASX banks also feature heavily, including Commonwealth Bank of Australia (ASX: CBA), National Australia Bank Ltd (ASX: NAB), and Bendigo and Adelaide Bank Ltd (ASX: BEN). The income that the VanEck Cash Plus ETF, as we've already noted, is planned to be distributed to investors on a monthly basis.
The MONY ETF is fresh off the line, having only debuted on the ASX boards last Wednesday, 4 February. As such, it has yet to declare its maiden dividend distribution. However, the provider tells us that the average yield to maturity of its portfolio is sitting at 4.4%.
We will anticipate the first monthly dividend distribution from the VanEck Cash Plus Active ETF with relish. Until that is revealed, investors should keep in mind that this ASX ETF charges a management fee of 0.15% per annum.
