It sounds like every income investor's dream. A stock with a dividend yield over 8% that also pays monthly dividends? I'm sure that sounds about as real as the Easter Bunny, right? Well, as it turns out, dreams really do come true on the ASX.

Allow me to introduce you to the Metrics Master Income Trust (ASX: MXT).

Let's get LIT

MXT is a Listed Investment Trust ('LIT'). Similar to a managed fund, an LIT takes the money it raises from its shareholders (or, in this case, 'unitholders') and invests it in a pool of assets. An LIT could invest its money in all sorts of different asset classes, from local and international shares to property, commodities, and fixed-income securities.

However, unlike most traditional investment funds, it trades on a stock market (like the ASX). This means investors can buy and sell units in the LIT just like shares in a company. So, there's no lengthy application process or minimum investment requirements (as is often the case with unlisted managed funds).

What does the Metrics Master Income Trust do?

MXT invests in fixed-income securities. As the name suggests, these are assets where the timing and amount of the repayments are fixed and known in advance. Think government and corporate bonds – or even a term deposit held with a bank.

When you purchase one of these securities, you know exactly how much interest you will be paid (and when), and you'll also know the amount you'll be repaid when the investment matures.

This is in contrast to shares, which aren't obliged to pay you a dividend, and can vary wildly in price. This is one key reason why fixed-income investments are generally considered lower risk than stocks.

What sort of things does MXT invest in?

MXT is quite unique because it provides investors with direct exposure to the corporate lending market. The Trust takes the money it raises from investors and lends it to large corporates operating across a range of industries. The goal is for its lending portfolio to earn a return that beats the Reserve Bank of Australia (RBA)'s annual cash rate by at least 3.25%.

MXT is a great option for investors seeking to diversify their portfolios. The corporate lending market is usually reserved only for the major banks, and MXT provides direct exposure to these returns right here on the ASX.

As of its 31 December 2024 half-year report, MXT held a little over $2.1 billion in financial assets and raked in a little over $88 million in total investment income.

How much does MXT return as dividends?

Over the past year, MXT has paid out 12 dividends (one, as promised, every single month), worth a total of 16.03 cents per share. At current prices, this gives it a trailing dividend yield of close to 8.3%.

Based on this performance, a $10,000 investment in MXT could earn you over $800 a year. And, if you make use of the Trust's dividend reinvestment plan, you could grow your wealth even faster by harnessing the magic of compound returns.

Are there other ASX stocks that pay monthly dividends?

Surprisingly, yes!

Two other options for investors seeking monthly income are the BetaShares Dividend Harvester Active ETF (ASX: HVST) and Plato Income Maximiser Ltd (ASX: PL8). Unlike MXT, these offer investors exposure to dividend-paying ASX stocks, but they still both come with juicy dividend yields.