One problem with Compound Interest it takes time to make noticeable growth.
An good example would be the thread Snowball, where if you could double your income stream in seven years instead of ten, you could start to re-invest
7 years 14k
14 years 28k
21 years 56k
yep, an interest rate of 56% on seed capital, no guarantees though.
As your intention is to live off the dividend stream when you retire, you would have no inclination to kill the Golden Goose that lays the Golden Eggs so you would have no interest in the value of your portfolio in 21 years time.
If you had 100k of your hard earned you might not wish to take the risk of a strategy new to you. Those who have a modest amount to invest but can add new funds on a regular basis may be more willing to take the chance. If you are still undecided look at the compound growth of house prices.
Using data from Nationwide Building Society, the average UK house price has risen from £1,884 in1953 to a staggering £270,867 in the 1st quarter of 2025.
I’ve just earned £1,104 of passive income in 2 weeks, thanks to blue-chip UK dividend shares
Story by Harvey Jones
I’m a late convert to the joys of passive income. In my early days as an investor, I mostly focused on growth. I didn’t know what I was missing.
The last month has been a rewarding one, with a string of dividend stocks in my self-invested personal pension (SIPP) dishing out their half-yearly payouts. And they’ve been in a generous mood.
On 9 May, M&G (LSE: MNG) kicked things off by paying me a chunky £458. That was the biggest of the lot, and unsurprisingly so, given that it has the single highest yield on the FTSE 100 at 9.31%.
M&G is a brilliant dividend stock
That’s what attracted me to the wealth manager in the first place. But as ever with a supersized yield like this one, it’s important to check whether it’s sustainable.
Yields are calculated by dividing the dividend per share by the share price. So when a stock price falls but the dividend stays the same, the yield rises. A really high yield can therefore signal trouble. I don’t think that’s the case with M&G.
Its shares are up a modest 8.6% over the last year, and 77% over five years. That latter number flatters it slightly, as it’s measured from the 2020 pandemic lows, when every stock was on the floor.
Risks and rewards
I’m happy to take the risk to get a higher return. I’ll mitigate it by holding a spread of different stocks, which I plan to keep for the long term. That helps me ride out short-term volatility.
As it turned out, 9 May was a red-letter day as FTSE 100 housebuilder Taylor Wimpey paid me £165. It’s another ultra-high-yielder, offering 8.04% on a trailing basis. No savings account can match that.
On 14 May, FTSE 250 insurer Just Group chipped in £45. All contributions welcome, even modest ones. Given the Just share price is up 38% in 12 months, and 75% since I bought it in November 2023, I’m not complaining.
Lloyds Banking Group picked up the pace by paying me £207 on 20 May, and insurer Phoenix Group Holdings kindly sent me £229 the day after.
Compound growth
In total, I’ve received £1,104 of passive income in a fortnight. I haven’t spent a penny of it. Instead, I’ve reinvested the lot straight back into the same stocks, which means I may earn even more dividends next year.
The fun is over for now but I should enjoy another income spree in the autumn, when the next set of dividends land. I’ll plough those straight back into my SIPP, to help my pension compound and grow over the years. Then when I finally retire, I’ll draw them as income, to top up my State Pension. With luck, I’ll be getting a lot more by then.
The proof of the pudding is in the eating. Below is the journey of the Snowball to date.
The Snowball was started with a seed capital of 100k and the first dividend was earned on the 25/11/22.
Dividends to date all year end.
2022 £1,609.21
2023 £9,422.59
2024 £10,796.00
The actual amount of dividends varied as some companies paid a special dividend which isn’t repeatable.
The plan copied below was to increase the Snowball by compound growth of 7% per year.
The snowball effect in investing refers to the power of compounding, where small investments grow exponentially over time. This concept is central to long-term wealth building, and Warren Buffett himself has famously used it to amass his fortune. As the Snowball rolls along the Snowball gathers more mass and continues to grow in size.
How It Works:
Reinvesting Profits – When you reinvest dividends or returns, your investment base grows, leading to even larger future returns.
Compounding Interest – Earnings generate more earnings, creating a cycle of exponential growth.
Consistent Contributions – Regularly adding to your investments accelerates the snowball effect.
Example:
Imagine you invest in dividend-paying stocks. Over time, as dividends are reinvested, you acquire more shares, increasing your future dividend payouts. This cycle continues, leading to massive wealth accumulation.
Chat GPT
The plan.
Year End Dividends
2023/£7,000
2024/£7,490
2025/£8,014
2026/£8,575
2027/£9,175
2028/£9,817
The current projection for 2025 is £10,000 because the yields on most REIT’s and Renewables were above 7% for the period above. Note that most REIT’s have corrected in value and as the price rises the yield falls. Also remember most Investment Trusts try to increase their dividends by inflation or above.
The Snowball is well ahead of the time line with the current expected dividend equal to the year end of 2028.
The fcast for next year could be increased to £10,700 with a target of £11,000 but early days for that.
Expected dividends by the end of the halfway point for the year £1,552.00
Total £4,798.00
The dividend from VPC of £1,933.00 is not a repeatable dividend so is not included in the figure above but part of it may be used to ensure the Snowball reaches its target for the year of 10k.
The Snowball bought AGR for the ‘secure’ yield (buying yield). As the price fell 42p the yield rose, div 3.36p buying yield 8%. Bought a couple days before the xd date 06/03/25 @ 41.39p for the yield and the plan was to hold for the long term and to re-invest the dividends.
AGR received a bid from KKR and the price rose 46.48p , the running yield fell to 7%, so the profit was booked, you can see the total profit is made up of trading gains and dividends received. If you receive a bid it’s mainly down to luck but sometimes it’s better to be lucky than to be clever.
PHP have made a rival bid for AGR and if successful the Snowball would look to buy for the portfolio, maybe.
If you trade, you will need to book some profits to balance out any clunkers in your portfolio.
High-dividend ETFs offer instant diversification and potential income.
The investing information provided on this page is for educational purposes only. NerdWallet, Inc. does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments.
Updated May 21, 2025
Fact Checked
Written by Alana Benson
Lead Writer+ more
Reviewed by Tiffany Kent
Certified financial planner
Edited by Arielle O’Shea
Head of Content, Investing & Taxes
Co-written by Kevin Voigt
Contributing Writer
Dividends can be a powerful source of income, and during times of stock market volatility, dividend-paying companies may even be more stable than their growth-stock peers. To generate income, some investors harness dividends by investing in dividend stocks individually, but there’s another option for those who want to save some time and energy: high-dividend ETFs.
7 high-dividend ETFs
Below is a list of seven large-cap U.S. dividend ETFs, ordered by annual dividend yield. Note that some high dividend ETFs may come with higher risk (rather than the stability some dividend investors are looking for). Always read the fine print, investigate dividends that seem too good to be true and look at the components of the ETF to determine if it fits in your portfolio.
The best high-dividend ETF is Invesco KBW Premium Yield Equity REIT ETF (KBWY), which currently has a dividend yield of 9.93%. This is based on our screen of U.S. equity ETFs, which excludes inverse, leveraged and actively managed ETFs and any with expense ratios over 0.5%.
Ticker
Company
Dividend Yield
KBWY
Invesco KBW Premium Yield Equity REIT ETF
9.93%
XSHD
Invesco S&P SmallCap High Dividend Low Volatility ETF
7.48%
NUDV
Nuveen ESG Dividend ETF
5.66%
DIV
Global X SuperDividend U.S. ETF
5.61%
SPYD
SPDR Portfolio S&P 500 High Dividend ETF
4.48%
RDIV
Invesco S&P Ultra Dividend Revenue ETF
4.15%
SCHD
Schwab US Dividend Equity ETF
3.96%
Source: Finviz. ETF data is current as of May. 21, 2025, and is intended for informational purposes only.
High-dividend ETFs may generate income
Dividend-paying ETFs can be a great tool for those looking to increase cash flow and diversify their investments. They offer a simple solution to getting exposure to a specific investing niche — in this case, stocks that pay a regular dividend.
You can use those dividends to pad your income as many retirees do. You can also reinvest those dividends back into the fund to better take advantage of compound interest and grow your investment portfolio. Whatever you choose, dividend-paying ETFs make it easy to add a large variety of investments to your portfolio all at once.
9 Highest-Yielding Monthly Dividend Stocks for May
Monthly dividend stocks like ARR and AGNC can provide investors with frequent payments — but those payments aren’t always sustainable. Here’s what to know.
The investing information provided on this page is for educational purposes only. NerdWallet, Inc. does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments.
Updated May 2, 2025
Written by Sam Taube
Lead Writer
Edited by Chris Davis
Managing Editor
Nerdy takeaways
Monthly dividend stocks are shares of publicly-traded companies that pay dividends on a monthly frequency.
Many monthly dividend stocks have potentially-unsustainable dividends, and may not be able to continue their payouts indefinitely.
Some ETFs pay dividends monthly, although they may not be composed of monthly dividend stocks.
After years of high inflation, many Americans — retirees in particular — could use a little extra cash every month. Monthly dividend stocks are one investment that can provide it. And for dividend investors, there’s even a silver lining to the stock market volatility we’ve seen in 2025: it has pushed the yields on many dividend stocks up into the double-digits.
Top 9 monthly dividend stocks by yield
Below is a list of the 9 highest-yielding monthly dividend stocks with market capitalizations of at least $1 billion and payout ratios below 100%, meaning they are paying out less in dividends per share than they are bringing in in earnings per share (EPS).
They are ordered by forward dividend yield, which is calculated by dividing the sum of a company’s projected dividend payouts over the next year by its current share price.
Tip: You can use the dividend yields below to fill out our dividend calculator and estimate future gains for a particular stock.
Company name
Forward dividend yield (annual)
Armour Residential REIT (ARR)
17.52%
AGNC Investment Corp. (AGNC)
16.25%
Ellington Financial (EFC)
12.01%
Apple Hospitality REIT (APLE)
8.07%
EPR Properties (EPR)
7.09%
Realty Income Corp. (O)
5.63%
Main Street Capital Corp. (MAIN)
5.62%
SL Green Realty Corp. (SLG)
5.60%
Stag Industrial, Inc. (STAG)
4.41%
Source: Dividend.com. Stock data is current as of May 2, 2025, and is for informational purposes only.
What are monthly dividend stocks?
Monthly dividend stocks are a subcategory of dividend stocks: shares of publicly-traded companies that pay a portion of their profits to shareholders.
Many dividend stocks pay out dividends quarterly or annually, but monthly dividend stocks, as their name implies, pay out every month.
Pros and cons of monthly dividend stocks
The biggest advantage of monthly dividend stocks is the frequent, and often substantial, payments they provide. Some of the stocks listed above have yields more than twice as high as the 10-year Treasury note. And while Treasury bond holders only get paid twice a year, monthly dividend stock holders get paid every month.
Proposed Asset Realisation Strategy and Change in Investment Management Fee
In the Company’s annual results announcement dated 3 April 2025, the board of directors of the Company (the “Board”) noted that it was examining all options for repaying the trust that the Company’s shareholders (the “Shareholders”) have placed in the Company over the past four years since the Company’s initial public offering (“IPO”). The Board, directly and through its corporate broker, Numis Securities Limited (“Deutsche Numis”) has engaged with a significant proportion of the Shareholders over the past six months. While no one option was favoured by all Shareholders, the feedback from the majority of Shareholders was a desire for the Company to return capital via a sale of the Company’s portfolio of assets (the “Portfolio”) with a view to maximising value. Shareholders were rightly cognisant of the balance between expedited returns of capital and damaging the long-term value of the Portfolio through untimely sales.
As such, the Board today announces that it intends to commence an asset realisation strategy (the “Proposed Asset Realisation Strategy”) which will require a change to the Company’s investment policy. The Proposed Asset Realisation Strategy will involve mandating the Company’s current alternative investment fund manager (“AIFM”), Victory Hill Capital Partners LLP (“Victory Hill”), to sell the Portfolio in a timely manner with a view to maximising value. The Board is firmly of the opinion that it is in Shareholders’ best interests to retain Victory Hill to deliver the Proposed Asset Realisation Strategy. It is with that in mind that the Board has sought to align and incentivise Victory Hill to manage the Portfolio on this basis.
The Board and Victory Hill note that some Portfolio assets are in a better position to be sold than others given their operational maturity. Some Portfolio assets need further management before they can be sold at a value that the Board and Victory Hill believe would be acceptable to Shareholders, although it is also within the Proposed Asset Realisation Strategy for the Company to consider offers for all of the Portfolio assets to be sold as a whole. In any case, the Board anticipates, having taken advice from Victory Hill, that the Proposed Asset Realisation Strategy will be completed in no longer than 3 years, by which point all capital will have been returned to Shareholders, and the Company would de-list and be liquidated (the period running for 3 years from the date that resolutions to be put to Shareholders to approve and implement the Proposed Asset Realisation Strategy (the “Resolutions”) are passed, being the “Realisation Period”). The Board will consider methods to return cash to Shareholders as realisations are made over time. Cash will be returned to Shareholders as and when the Company holds enough cash from the sale of Portfolio assets to justify the cost of effecting a return to Shareholders.
Advantages of the Proposed Asset Realisation Strategy and Change in Investment Management Fee
The Board understands that the persistent deep discount that ENRG’s shares (the “Shares”) trade at relative to its NAV is, in part, an indication that investors currently do not value exposure to uncorrelated, highly cash generative assets, such as those forming the Portfolio. The Board notes that while a minority of Shareholders wish to see the Company continue with its current strategy, the clear majority of Shareholders support an asset realisation strategy such as the one proposed.
The Board believes the Proposed Asset Realisation Strategy and change in investment management fee (described in more detail in the section below) are in the best interests of Shareholders for the further key reasons:
· Satisfying Shareholder demands for return of capital: the majority of Shareholders are as frustrated as the Board with the Company’s Share price discount to NAV. The discount issues are sector-wide and Shareholders are understandably seeking capital returns at the highest achievable value, and in as short a time frame as possible. The Board believes the Proposed Asset Realisation Strategy is the best and most realistic route to this outcome.
· Victory Hill is the right investment manager to deliver maximum returns to Shareholders: the Board believes that Victory Hill is the best investment manager to deliver a successful realisation of the geographically and technologically diverse Portfolio while continuing to manage the Portfolio on a day-to-day basis throughout the Realisation Period. The Board also believes that successful implementation of the Proposed Asset Realisation Strategy will depend on having the support of the operating partners in relation to the Portfolio assets, which is much more likely with Victory Hill’s guidance given their ongoing strategic relationships. Retaining Victory Hill limits any disruption in the asset management progress within the Portfolio and allows the Company to begin the Proposed Asset Realisation Strategy shortly following the required Shareholders’ approvals.
· Victory Hill will be appropriately incentivised to dispose of the Portfolio in its entirety and deliver the highest achievable returns to Shareholders: Victory Hill’s business, like ENRG’s, will fundamentally change as a result of the Proposed Asset Realisation Strategy. The introduction of the Performance Fee (defined and explained in more detail in the section below) clearly aligns Victory Hill’s interests with the Board’s and Shareholders’ to sell the Portfolio in as short a time frame as possible, at the highest possible value within that timeframe. The Performance Fee will only become payable to Victory Hill if the entire Portfolio has been realised (save for any reserved temporary investments) and Shareholders have received their full (net of fees, costs, expenses, taxes, other liabilities and any reserves needed in order to achieve an orderly winding-up of the Company) cash returns above a hurdle rate based on the Company’s NAV, explained in more detail in the section below. The Board believes this reduces the risk of part of the Portfolio remaining unsold at the end of the Realisation Period and incentivises Victory Hill to sell the Portfolio in as short a time period as possible.
· Net returns could represent a material uplift to the current share price: Given Victory Hill is incentivised to aim for asset sales at the highest value possible (see hurdle levels, based on the NAV, in the section below) within the Realisation Period, and the Shares currently trade on a 44% discount to NAV (as at the close of business on 21 May 2025), there is scope for Shareholders to benefit from material share price returns in excess of the current share price if Victory Hill is to achieve a Performance Fee. The Board is hopeful that the Proposed Asset Realisation Strategy could result in a reasonable NAV total return for Shareholders that invested at IPO, albeit not the type of return that it would have initially hoped at IPO and that could potentially be achieved with a continuation of the Company’s current strategy.
Proposed Change in Investment Management Fee
In acknowledging that Victory Hill’s portfolio management role will fundamentally change, the Board has agreed in principle with Victory Hill to revise the fees payable under the alternative investment fund management agreement between the Company and Victory Hill (the “AIFM Agreement”) with effect from the passing of the Resolutions. The general meeting (the “General Meeting”) at which the Resolutions will be sought is expected to be held in August 2025 (see “Expected Timetable” section below). Principally, and as supported by Shareholders’ feedback, the Board believes that the proposed performance fee structure will align Victory Hill’s interests with the interests of Shareholders to complete the Proposed Asset Realisation Strategy whilst seeking the maximum achievable values, at the point of realisation, in a timely fashion.
The key proposed changes to the fees payable to Victory Hill under the AIFM Agreement are set out below and
further detail on proposed changes to the AIFM Agreement will be provided in a circular to Shareholders (the “Circular”) to be published in due course that will convene the General Meeting.
Current investment management fee
Victory Hill currently receives an annual investment management fee calculated as a percentage of the Company’s net asset value (calculated in accordance with the terms of the AIFM Agreement) (“NAV”) as follows:
· 1% on the first £250m of NAV;
· 0.9% on NAV in excess of £250m and up to and including £500m; and
· 0.8% on NAV in excess of £500m,
(the “Current Fee”).[1] The Current Fee is payable exclusive of value added tax.
Proposed investment management fee
The Board is proposing to change the Current Fee with effect from the date that the Resolutions are passed to:
· a base fee (the “Base Fee”) of £4.25m per annum, for the Realisation Period. For the avoidance of doubt, the Base Fee will cease to be payable if the Company terminates Victory Hill’s appointment as AIFM for convenience (i.e. otherwise than for cause) on giving Victory Hill 12 months’ written notice (the “Notice Period”) in accordance with the terms of the AIFM Agreement. For example, if the Company terminates Victory Hill’s appointment in the first year, then Victory Hill will only be entitled under the existing provisions of the AIFM Agreement to receive up to 12 months’ worth of Base Fee and not for the full Realisation Period; and
· a performance fee (the “Performance Fee”) on the terms set out below,
(the Base Fee and the Performance Fee being together the “Proposed Fee”).[2]
The Performance Fee will be the Performance Percentage (defined below) of all realisation proceeds (the “Realisation Proceeds”) of Portfolio assets plus any dividends paid during the Realisation Period that are in excess of a hurdle (the “Hurdle”) based on the proportion of the Company’s most recently published NAV prior to the date that the Circular is published (the “Reference NAV”) applicable to the relevant Portfolio assets. The Hurdle shall apply during the Realisation Period, based on the year during the Realisation Period in which an asset is deemed sold, as follows:
· Year 1: 85% of Reference NAV
· Year 2: 90% of Reference NAV
· Year 3: 100% of Reference NAV.
Performance against the Hurdle will be assessed at the point at which a legally binding contract has been entered into by the relevant member of the Company’s group to dispose of the relevant Portfolio asset.
The Performance Fee will only become payable to Victory Hill (i) if the entire Portfolio has been realised (save for any reserved temporary investments); (ii) if the aggregate amount of Realisation Proceeds returnable to Shareholders (“Total Returns”) are at least 85% of the Reference NAV; and (iii) once Shareholders have received their full (net of fees, costs, expenses, taxes, other liabilities and any reserves needed in order to achieve an orderly winding-up of the Company) cash returns.
The “Performance Percentage” will be:
· 0%, if the Portfolio is not realised within the Realisation Period or Total Returns are less than 85% of the Reference NAV;
· 15%, if Total Returns are equal to or exceed 85% of the Reference NAV;
· 17.5%, if Total Returns are equal to or exceed 90% of the Reference NAV; or
· 20%, if Total Returns are equal to or exceed 95% of the Reference NAV.
The Performance Fee will be calculated and accrued on the earlier to occur of the (i) end of the Realisation Period; and (ii) point at which a legally binding contract has been entered into by the relevant member of the Company’s group to dispose of the final unrealised asset forming part of the Portfolio. The Proposed Fee is payable exclusive of value added tax.
In the event that the entire Portfolio has not been realised at the end of the Realisation Period the Board shall consider at that point what might be best for the future of the Company, which might involve proposals for Shareholders to vote on the continuation of the Company, or to vote on the voluntary liquidation, unitisation, reorganisation or other reconstruction of the Company.
The proposed changes to the fee arrangements within the AIFM Agreement will be deemed a related party transaction under the UK Listing Rules (“UKLR”), and are subject to Shareholders’ approval by ordinary resolution. The Board will also require a fair and reasonable opinion from Deutsche Numis, as sponsor of the Company.
Reasons why the Board believes key elements of the Proposed Fee are in the best interests of Shareholders
· 3-year time horizon balances objectives: the Board and Victory Hill believe that certain assets in the Portfolio may be sold at a suitable value much sooner than 3 years. However, given the Company’s assets are at different stages of operational maturity, it is likely that some assets may take up to 3 years to sell at a price that would satisfy the Board’s view of value. The 3-year time horizon should allow Victory Hill to manage the assets into a sales process considerately without immediately becoming a ‘forced seller’. The Board and Victory Hill are confident that the Portfolio can be realised over a period of 3 years without exposing Shareholders to new asset-specific risks. The Board, as advised by Victory Hill, believes that a shorter time period than 3 years, is likely to lower the anticipated risk-adjusted return to Shareholders.
The current list for a replacement share for VPC, has ENRG sailed without the Snowball onboard ?
