How do ETFs pay dividends?

ETFs that hold dividend-paying stocks or interest-paying bonds receive income as the underlying securities pay it. The ETF aggregates that income, subtracts fund expenses, and then distributes what remains to shareholders, typically monthly or quarterly. (investor.gov)

The distribution amount can vary because underlying dividends change, bond interest changes, and portfolio composition shifts. Bond ETFs may distribute more steadily than equity ETFs, but even bond income can move as yields and holdings change.

If you're using ETFs for income, check the distribution schedule and the type of income (qualified dividends vs ordinary, interest, or sometimes return of capital). Your brokerage statements and the fund's tax documents usually break this down.