Investing in individual companies on the ASX can be daunting for retirees.
Australia and New Zealand Banking Group (ASX: ANZ) and Telstra Corporation Ltd (ASX: TLS) are two examples of large blue chips that have cut their dividends in recent years.
That's why real estate investment trusts (REITs), exchange-traded funds (ETFs) and listed investment companies (LICs) could be easier to hold for the long-term with less volatility and more reliable income.
So, here is one of each:
Vitalharvest Freehold Trust (ASX: VTH)
This is an agricultural REIT that owns farmland. It currently owns substantial berry and citrus fruit properties that are leased to its main tenant Costa Group Holdings Ltd (ASX: CGC), although Vitalharvest plans to acquire additional farms to diversify away from Costa.
Vitalharvest receives a base rent based on its cost base and also generates variable rent because it receives a quarter of the earnings generated from the properties as well.
It currently has an annualised distribution yield of just over 8%.
BetaShares Australia 200 ETF (ASX: A200)
It's probably safer to invest in a large basket of shares like the ASX 200 rather than a single business unless you have high confidence in the ASX shares you own.
This exchange-traded fund (ETF) has the lowest management fee cost of any ASX-focused ETF of 0.07% per annum, which leaves more net returns for your retirement portfolio.
According to BetaShares, this ETF has a dividend yield of 4.74% with franking credits on top of that. However, this ETF does have significant exposure to the big ASX banks like Commonwealth Bank of Australia (ASX: CBA) and Westpac Banking Corp (ASX: WBC), so it does have its downsides compared to other ETFs.
WAM Research Limited (ASX: WAX)
This is a listed investment company (LIC) operated by the high-performance investment team at Wilson Asset Management.
The aim of the LIC is to pick small and medium sized businesses that can beat the market, otherwise it will happily just hold cash. Over the past seven years its portfolio has generated an average return per annum of 16.8% before fees and expenses, outperforming the S&P/ASX All Ordinaries Accumulation Index by 7% per annum.
It mostly pays out these returns as a steadily-growing fully franked dividend, which has grown every year since the GFC. It currently has a grossed-up dividend yield of 9.6%.
Foolish takeaway
Each of these shares has compelling attributes, but at the moment I like the idea of Vitalharvest because it's trading at around its NTA. WAM Research is valued at a high premium to its NTA and the ASX200 is close to a multi-year high.
