As most ASX income investors would know, it's the norm here on the ASX for dividend shares to give investors a dividend paycheque every six months. Most ASX shares, including the vast majority of the blue chips that most investors would be familiar with, fit this mould.

That's everything from the big four banks and BHP Group Ltd (ASX: BHP) to Telstra Group Ltd (ASX: TLS), Woolworths Group Ltd (ASX: WOW) and CSL Limited (ASX: CSL).

This is actually quite unusual compared to other economies. In both the United States and the United Kingdom, quarterly dividend payments are the norm.

This situation that faces ASX investors makes using dividend shares as a source of passive income rather tricky. It can be hard to budget if you finally get to retire off of dividend income, but you only get paid twice a year.

So are there any alternatives to this six-month paycheque schedule?

How to secure monthly dividends on the ASX

Well, investors can always choose a variety of ASX shares. Not all dividend shares pay out their dividends in the same month. For example, Commonwealth Bank Of Australia (ASX: CBA) typically pays out its bi-annual dividends in March and September.

But Woolworths often forks out its shareholder cash in April and October, while Westpac Banking Corp (ASX: WBC) typically schedules its dividends for June and December. 

So you can pick a wide basket of ASX 200 blue chip dividend shares, and get something of a spread in dividend payments.

But otherwise, investors can utilise exchange-traded funds (ETFs) if they desire more frequent cash flow. Most ASX-based ETFs, such as the Vanguard Australian Shares Index ETF (ASX: VAS), will usually pay out quarterly distributions. As do funds covering overseas markets like the iShares S&P 500 ETF (ASX: IVV). These normally occur in January, April, July and October.

So using a mixture of ASX dividend shares and ETFs will get you even more frequent payments.

The final option for those desperate for a monthly paycheque is to find a company, ETF, listed investment company (LIC) or managed fund that pays out dividends every month.

These are rare, but they are out there. One example is the Plato Income Maximiser Fund (ASX: PL8). This LIC prioritises consistently funding monthly dividend paycheques to its investors. These typically come fully franked as well.

Another monthly dividend-payer is the BetaShares Australian Dividend Harvester Fund (ASX: HVST). This ETF also pays out monthly dividend distributions but uses derivatives to boost its come payments as well.

So if you do wish to secure monthly dividend paycheques from your ASX shares, there are a few ways to go about it.

The post Here's how I would secure monthly dividends in the 2024 financial year with these ASX stocks appeared first on The Motley Fool Australia.

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.

If you're keen to invest but don't relish the idea of buying individual ASX shares, exchange-traded funds (ETFs) could be a great option for you.

Even if you already own shares, ETFs can be a simple and cost-effective way of helping to diversify your portfolio across different companies, sectors, and geographic locations.

Due to their surging popularity among Aussie investors, the number of ETFs on the local exchange has skyrocketed in recent years. So even choosing which ETF to buy can be a challenge.

We asked our Foolish writers which ASX ETFs they believe are worth buying this month. Here is what the team came up with:

6 best ASX ETFs for February 2023 (smallest to largest)

VanEck Morningstar International Wide Moat ETF (ASX: GOAT), $25.09 million

BetaShares Australian Dividend Harvester (ASX: HVST), $178.96 million

Vanguard MSCI International Small Companies Index ETF (ASX: VISM), $251.86 million

VanEck Morningstar Wide Moat ETF (ASX: MOAT), $509.56 million

Betashares Nasdaq 100 ETF (ASX: NDQ), $2.60 billion

Vanguard Australian Shares Index ETF (ASX: VAS), $12.24 billion

(Market capitalisations as at market close on 6 March 2023)

Why our Foolish writers love these ASX exchange-traded funds

VanEck Morningstar International Wide Moat ETF

What it does: This ETF provides investors with exposure to a portfolio of global companies that have attractive valuations and sustainable competitive advantages.

By James Mickleboro: Unlike the MOAT ETF, which focuses on US companies, this fund gives investors access to wide-moat companies from all over the world.

To be assigned a wide-moat rating, there must be very high confidence that a company's competitive advantage will remain for at least 20 years. It is for this reason, I believe the VanEck Morningstar International Wide Moat ETF could prove to be a great long-term option for ASX investors.

Among its 68 holdings are companies including Airbus, ASML, Mercadolibre, and Microsoft.

Over the last decade, the index the fund tracks has generated an average return of 16% per annum.

Motley Fool contributor James Mickleboro does not own units in the VanEck Morningstar International Wide Moat ETF.

BetaShares Australian Dividend Harvester

What it does: The BetaShares Australian Dividend Harvester intends to offer investors franked passive income above the net income yield of the broader ASX. It provides exposure to a diversified portfolio of ASX shares. The ETF's top holdings are in the financials sector (30%) and the materials sector (25%).

By Bernd Struben: With interest rates likely to remain elevated for some time, making share price gains harder to come by, this high-yielding ETF could offer some welcome passive income for ASX investors.

Based on the past 12 months, the fund's yield is 7.2%, with a grossed-up yield of 10.1%. The franking level was 93%, as at 31 January.

Naturally, movements in the ETF's share price could see investors pocket more or less than this when they sell the stock.

Over the past six months, the BetaShares Australian Dividend Harvester share price is up 3.8%. During that time, it delivered a net return (after fees) of 5.9% and a grossed-up yield (also post fees) of 7.1%.

The dividends are paid out monthly.

Motley Fool contributor Bernd Struben does not own units in the BetaShares Australian Dividend Harvester.

Vanguard MSCI International Small Companies Index ETF

What it does: This Vanguard ETF seeks to track the performance of the MSCI World ex-Australia Small Cap Index, providing investors with an easy way to gain diversified exposure to some of the most promising small companies abroad.

By Mitchell Lawler: Studies into the characteristics of global outperformers over the last decade have suggested that small-cap shares are far more likely to produce 10X returns than large-caps.

I believe this ETF provides an ideal way of gaining exposure to companies with, arguably, the greatest chance of achieving market-beating returns over time. Additionally, the fund excludes Australian small-caps, which helps with greater geographic portfolio diversification.

For reference, around 62% of the ETF is weighted toward companies located in the United States. This includes US-listed names such as Axon Enterprises Inc, Crocs Inc, and Macy's Inc.

The management fee is currently 0.32% per annum.

Motley Fool contributor Mitchell Lawler does not own units in the Vanguard MSCI International Small Companies ETF.

VanEck Morningstar Wide Moat ETF

What it does: This ETF invests in companies with competitive advantages that are predicted by analysts to almost certainly endure for the next decade, and probably for two decades.

By Tristan Harrison: Competitive advantages, or economic moats, can come in a number of different forms, including cost advantages, patents, brands, regulatory licenses, switching costs, network effects, and efficient scale.

By only focusing on companies with strong competitive advantages, this ETF's portfolio only owns quality businesses. On top of that, the ETF only invests if the target business is trading at a good price relative to its 'fair value', as judged by Morningstar analysts.

Past performance is not a guarantee of future results, but this ETF has returned an average of 14.5% per annum over the past five years.

Motley Fool contributor Tristan Harrison does not own units in the VanEck Morningstar Wide Moat ETF.

Betashares Nasdaq 100 ETF

What it does: This ASX ETF from BetaShares is an index fund. Not just any index fund, though; this ETF covers the American NASDAQ 100 (NASDAQ: NDX). The NASDAQ is the exchange where most of the US's tech shares are listed. As such, this is well-known as a very tech-heavy ETF.

By Sebastian Bowen: I consider this NASDAQ 100 fund a bet on American tech going forward. You'll get exposure to the giants like Apple and Amazon, as well as smaller tech names like Texas Instruments, Adobe, Intuit and MercadoLibre.

The BetaShares Nasdaq ETF has given investors some stunning returns in recent years. As of 31 January, this fund has averaged a return of 15.24% per annum over the past five years, and 15.65% per annum since its inception in 2015.

Past performance is never a guarantee of future returns, but I still think investors have a great way to add exposure to some of the best companies in the world with this ETF.

Motley Fool contributor Sebastian Bowen owns shares in Amazon, Apple and Adobe.

Vanguard Australian Shares Index ETF

What it does: The Vanguard Australian Shares Index ETF aims to track the S&P/ASX 300 Index (ASX: XKO) which, in turn, seeks to provide exposure to the broader Australian stock market.

By Brooke Cooper: It's far from a ground-breaking recommendation, and that's one of the reasons I like the Vanguard Australian Shares Index ETF.

Perhaps the best and most simple way to help protect a portfolio is to diversify, and one of the simplest ways to diversify is to invest in an index-tracking ASX ETF.

The Vanguard Australian Shares Index ETF is the only fund tracking the ASX 300 ­– arguably Australia's true benchmark index.

And while its management fees aren't the lowest out there, at 0.1% per annum, they're far from outrageous. Not to mention, this ETF pays out dividends each quarter.

Motley Fool contributor Brooke Cooper does not own units in the Vanguard Australian Shares Index ETF.

The post Top ASX ETFs to buy in March 2023 appeared first on The Motley Fool Australia.

Finding ASX dividend shares with yields over 10% can be a dangerous game. A yield over 10% normally indicates that the market views the yield as risky, and primed for a possible dividend cut. Otherwise, it's likely that the share price would be bid up until the yield is lower.

So let's take a look at these 3 ASX dividend shares with trailing yields over 10% to see if we can find a diamond in the rough.

BetaShares Australian Dividend Harvester Fund (ASX: HVST)

This exchange-traded fund (ETF) employs a 'dividend harvesting' strategy. This means it buys ASX dividend-paying shares just before they're about to go 'ex-dividend', after which the fund sells them again. In this way, it rotates in and out of most of the dividend heavyweights on the S&P/ASX 200 Index (ASX: XJO).

On one level, this strategy works to produce formidable dividend income. HVST currently has a trailing yield of 12%, or 16.8% grossed-up with franking.

Sounds pretty good, right?

Well, the downside is that this strategy trades capital value for income. There's usually no free lunch when it comes to investing. And swapping in and out of dividend shares is no exception. Since its inception in October 2014, the fund has actually gone backwards, delivering a return of (1.17%). As such, I'm not too wild on this investment.

WAM Research Limited (ASX: WAX)

This listed investment company (LIC) specialises in buying undervalued ASX growth companies and selling them after a pricing 'catalyst' comes to pass. It has managed to do this quite successfully, netting investors a 13.4% return per annum on average since 2010.

WAM Research pays most of its profits out as dividends, which have been rising every year since 2010 as well. On current prices, this dividend equates to a yield of 7.01%, or 10.01% grossed-up.

LICs normally pay dividends out of a profit reserve, so let's take a look at WAX's tank to see how well-funded this dividend is. As of 30 April, WAM Research has 26.2 cents per share in profits against its most recent dividend of 4.9 cents per share. As such, I think this is a rare diamond of an investment which can sustain a grossed-up yield over 10%.

Alumina Limited (ASX: AWC)

Alumina is Australia's largest aluminium pure play and has amassed a reputation as a generous dividend payer over the last few years.

On current prices, Alumina is offering a trailing yield of 7.74% – which grosses-up to 11.06% with full franking.

Unfortunately, I think Alumina's dividend yield is unsustainable. Aluminium prices have fallen substantially in 2020, which will crimp the ability of this company to keep shovelling cash out the door. This is probably the reason Alumina shares have collapsed in 2020 so far, falling from $2.30 at the start of the year to today's closing price of $1.51.

I have to agree with the market sentiment on this one that Alumina's dividend isn't sustainable going forward.

The post 3 ASX dividend shares with yields over 10% appeared first on The Motley Fool Australia.

One of the biggest benefits of owning shares is that they pay dividends. But how often do shares pay out dividends?

When we think about interest earned from a bank like Commonwealth Bank of Australia (ASX: CBA) we get interest every month. But dividends don't work like that.

Most Australian companies only pay a dividend every six months to align with their half-year reporting periods. For example, Australia's biggest miner BHP Group Ltd (ASX: BHP) reports its half-year report for the six months to 31 December and the full year to 30 June. BHP then pays its six-monthly dividend three months after the reporting period ends in March and September.

There are some other companies that report for the six month periods to June and December, but have different payment cycles. For example, Sydney Airport Holdings Pty Ltd (ASX: SYD) pays its dividends in February and August.

Different businesses have different 12-month reporting periods. Australia and New Zealand Banking Group (ASX: ANZ) reports its full year to 30 September, so it pays its dividend in December and July.

There are some companies and real estate investment trusts (REIT) that pay quarterly not half-yearly. For example, Rural Funds Group (ASX: RFF) pays in January, April, July and October. Arena REIT No 1 (ASX: ARF) pays in February, May, August and November. Dicker Data Ltd (ASX: DDR) pays in March, June, September and December.

If you wanted to, you could construct a portfolio of good shares that pay in different months so that you receive at least one payment in every month.

However, there are a small number of shares that actually aim to pay out a dividend every single month like BetaShares Australian Dividend Harvester Fund (ASX: HVST), although the total returns have been disappointing from this fund since inception, and Contrarian Value Fund Ltd (ASX: CVF).

Foolish takeaway

Over the course of a whole year it doesn't really matter when payments are made, but it can help with cashflow if the payments are spread out. I'm most interested in businesses that have reliable dividends and will generate growth.

The post How often do shares pay out dividends? appeared first on The Motley Fool Australia.

I'm sure most investors out there (and especially those who love their dividends) will have had this thought at least at some point in their investing career – "why not buy a share before it goes ex-dividend and then sell it?". We can call this strategy 'dividend harvesting' and it's a counterpoint to the traditional 'buy-and-hold' strategy that many dividend investors employ.

Does dividend harvesting work?

That's a tricky question to answer. The first thing to note is that there is no free lunch with dividends. You will notice that when a stock goes ex-dividend, the share price will normally drop to match the departing yield: just take a look at the Commonwealth Bank of Australia (ASX: CBA) share price this week to see this in action.

Another thing to note is the performance of an exchange traded fund (ETF) that follows this strategy. The BetaShares Australian Dividend Harvester Fund (ASX: HVST) has an objective to "provide investors with exposure to large capitalisation Australian shares along with regular franked dividend income, paid monthly, that is at least double the income yield of the broad Australian share market on an annual basis". The ETF does this by 'rotating' into a dividend paying stock like Commonwealth Bank or BHP Group Ltd (ASX: BHP), for example, before it goes ex-dividend and subsequently 'rotating out' following the ex-dividend date and moving on to another dividend stock. This process (or 'rebalancing') is undertaken every two months and by its use, HVST is able to offer investors a trailing distribution yield of 8.2% (or 11.2% grossed-up).

What's the catch?

If this sounds too good to be true, consider this: at the time of inception (November 2014), this ETF was trading for $$25.32 but you can pick up units of HVST today for $15.21. Since 2014, there has yet to be a year where HVST shares have finished higher than they started the year at. In other words, if you invest in this ETF, you are basically giving away capital in exchange for a higher yield.

Foolish Takeaway

I believe the tale of HVST proves that dividend harvesting is not a successful strategy. Sure, you might be able to squeeze a higher yield than just holding the shares long-term, but you are selling off the family silver to do so. For me personally, I'm just sticking with 'buy-and-hold'.

The post What is ASX dividend harvesting (and should you do it?) appeared first on The Motley Fool Australia.

Well, it's official. Interest rates have been cut and your bank accounts and term-deposits are about to get a whole lot less lucrative (and it's not like it was any good before last week). Commonwealth or state government bonds aren't looking too good going forward either. We are now getting to that fabled point that you are almost better off leaving your cash under the mattress than in a bank.

This means it's time to have a look at what the share market is offering yield-hungry investors, as it is increasingly the only place to turn for any kind of inflation-beating returns. Here are two out-of-field options for income investors that are outside the traditional ASX blue-chips you would normally find in your typical dividend portfolio. One is a very conservative option, whilst the other might be more for the 'crazy-brave' income investor out there.

Vanguard International Credit Securities Index Fund (Hedged) (ASX: VCF)

This ETF from Vanguard gives investors exposure to a portfolio of global fixed-interest bonds issued by governments, government-owned entities as well as investment-grade corporations. The bonds that are held are all rated BBB- or higher, meaning that there is very minimal risk of capital loss. The ETF is hedged to Australian dollars, which means that currency fluctuations won't affect the returns we can expect to receive.  With government bonds looking very underwhelming, I believe that any investors who are still seeking fixed-interest security need to look outside the box. VCF has a current running yield of 2.95% but has returned around 6.25% over the past year. That beats any term deposit out there by a mile.

BetaShares Australian Dividend Harvester Fund (ASX: HVST)

This ETF from BetaShares is designed for maximum income. It employs a slightly controversial method of doing so-called 'dividend harvesting' – this involves rotating around the ASX blue chips throughout the year, buying them before they go ex-dividend and then selling them afterward (rinse, repeat). While it's not the best way of preserving capital, it's hard to argue with HVST's grossed-up yield of 12.2% over the past 12 months from an income perspective. Two things to also keep in mind with HVST – the distributions are around 80% franked and are paid monthly.

Foolish Takeaway

The current economic climate is forcing income investors to look for unconventional solutions to the 'interest rate problem'. If you are an income investor, these two ETFs are well worth examining to see if they can fit into your strategy.

The post 2 exotic ASX ETFs to buy for income appeared first on The Motley Fool Australia.