Investing Idea: Funds That Pay You Monthly
For the most part, your investments are likely to offer you dividends every quarter or so. This can be frustrating if you are looking to create a monthly income stream. Happily, though, there are funds that pay you monthly, offering an income stream from your savings. Kiplinger offers a look at this investing idea:
Exchange-traded bond funds pay monthly. Most of Vanguard’s bond funds, whether in the format of regular funds or ETFs, make monthly distributions. So do many funds that invest in Ginnie Mae mortgage securities.
Some well-known mutual funds have increased the frequency of their distributions. In mid-2007, Loomis Sayles Global Bond FundLSGLX), which had made distributions annually, switched to a monthly payout schedule. And Loomis Sayles Bond FundLSBRX) switch from quarterly to monthly payouts. … ( (
One exception is Realty Income Corp. (O), which makes distributions every month (in fact, it has trademarked the slogan The Monthly Dividend Company). …
Oil and gas royalty trusts and master limited partnerships generally also pay every month.
You can see where such items would be helpful. For retirees, this type of monthly income stream is especially helpful. It provides more regular payments so that you can better coordinate them with your expenses. And oil and gas royalty trusts, especially, can be a great way to ensure a regular income.
But this investing idea isn’t just for retirees. If you have enough capital to invest it in a bond fund that pays monthly dividends, you can also create an income stream based your investment right now. This can ease things for you in other areas of your household budget.
As always, though, it is important to make sure that you are choosing funds that fit with your risk tolerance profile, and that have a reasonable expectation of regular returns. Diversification is also a good idea.
Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss. You are responsible for your own investment decisions.
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funds, investments, retirement planning
