Buy these ASX ETFs for big dividend income

These ETFs can be used by investors boost their dividend income materially.

| More on:
Man holding different Australian dollar notes.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

As well as giving investors opportunities to invest in indices and sectors from across the globe, some exchange traded funds (ETFs) have been set up to allow you to focus on a particular investment objective.

One of those objectives is dividend income.

With that in mind, let's get better acquainted with two ASX ETFs that provide investors with a nice income stream.

Here's what you need to know about them:

BetaShares S&P 500 Yield Maximiser (ASX: UMAX)

The BetaShares S&P 500 Yield Maximiser could be a top ASX ETF to buy if you're searching for income.

This ETF is somewhat unconventional. That's because it uses a clever equity income investment strategy over a portfolio of shares comprising the famous S&P 500 Index on Wall Street.

By doing so, the fund manager is able to deliver a greater dividend yield than you would expect to receive from buying the 500 stocks. Betashares notes that the additional income generated by UMAX's strategy may partly offset potential losses in falling markets.

For example, at present, the BetaShares S&P 500 Yield Maximiser's units are offering investors an impressive 6.9% distribution yield.

Among the shares listed on the S&P 500 index are dividend-payers such as Apple, Bank of America, Exxon Mobil, Home Depot, and Walmart.

Vanguard Australian Shares High Yield ETF (ASX: VHY)

The Vanguard Australian Shares High Yield ETF is a more traditional ASX ETF.

It uses broker research to build a diverse portfolio of ASX shares that have higher forecast dividend yields relative to the rest of the market.

Vanguard highlights that the ETF could be suitable for buy and hold investors that are seeking long-term capital growth, some tax effective income, and with a higher tolerance for the risks associated with share market volatility.

At present there are 72 ASX shares included in the portfolio. These include giants such as BHP Group Ltd (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA), Telstra Corporation Ltd (ASX: TLS), Wesfarmers Ltd (ASX: WES), and Woodside Energy Group Ltd (ASX: WDS).

The Vanguard Australian Shares High Yield ETF currently trades with an estimated forecast dividend yield of 5.3%.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended BetaShares S&p 500 Yield Maximiser Fund, Telstra Group, and Wesfarmers. The Motley Fool Australia has recommended Vanguard Australian Shares High Yield ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on ETFs

ETF written in gold with dollar signs on coin.
ETFs

ASX international shares ETFs smash record highs on Trump win

Several exchange-traded funds tracking global shares are moving higher today.

Read more »

Happy couple enjoying ice cream in retirement.
ETFs

Buy these excellent ASX income ETFs in November

Looking for easy income? Here are three ETFs that could help.

Read more »

A woman looks questioning as she puts a coin into a piggy bank.
ETFs

Why ASX ETFs are a great buy for beginner investors

ETFs could be exactly what beginner investors need.

Read more »

Male hands holding Australian dollar banknotes, symbolising dividends.
ETFs

Invest $1,000 into these ASX ETFs in November

These funds have been tipped as great options for investors.

Read more »

A girl is handed an oversized ice cream cone with lots of different flavours.
ETFs

3 megatrends accessible via the Vanguard MSCI Index International Shares ETF (VGS)

The ASX VGS makes it easy to invest in several global investment megatrends via a single trade.

Read more »

ETF written with a blue digital background.
ETFs

3 ASX ETFs that could soar under a Harris presidency

If the Democrats win the US election, Cameron Gleeson of Betashares says these ASX ETFs may benefit.

Read more »

ETF spelt out with a piggybank.
ETFs

3 ASX ETFs that could boom under a Trump presidency

Betashares Investment Strategist Cameron Gleeson offers some ideas for ASX ETF investment based on Trump's key policies.

Read more »

Two people having a meeting using a laptop and tablet to discuss Seven West Media's balance sheet
ETFs

4 top ASX ETFs to buy for a SMSF in November

Do you run an SMSF? Check out these funds this month.

Read more »