3 dividend growth ASX ETFs to compound your wealth

If you're not sure about buying individual shares, you could buy these ETFs.

| More on:
man on an iPad looking at chart of an increasing share price

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 a big believer in the power of compounding, I think that making long-term investments is one of the best ways to grow your wealth.

Especially if you can find investments that will pay you a growing stream of dividends. This helps put the power of compounding into overdrive. And who doesn't want that!

The good news is that investors don't just have to buy individual ASX dividend shares to achieve this.

That's because there are plenty of ASX exchange traded funds (ETFs) out there that also provide investors with the potential for growing dividends. Here are three to look at:

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

The BetaShares S&P 500 Yield Maximiser has been designed to generate attractive quarterly income and reduce the volatility of portfolio returns. It uses an equity income investment strategy over a portfolio of shares comprising the S&P 500 Index to achieve this.

The ASX ETF has grown its distribution three out of the last four years and appears well-placed to do it again this year. At present, the BetaShares S&P 500 Yield Maximiser's units currently trade with a trailing 6.9% distribution yield.

iShares Global Consumer Staples ETF (ASX: IXI)

As its name implies, the iShares Global Consumer Staples ETF gives investors exposure to global consumer staples companies. These are companies likes Coca-Cola, Nestle, Procter & Gamble, and Unilever, which produce products that remain in demand whatever happens in the economy.

This ASX ETF has grown its dividend for three years running and currently trades with a yield of approximately 2%. While this is not the largest yield, it has the potential to increase materially over the long term.

iShares S&P 500 ETF (ASX: IVV)

The iShares S&P 500 ETF aims to provide investors with the performance of Wall Street's famous S&P 500 Index before fees and expenses. It also offers investors a growing source of income, with the ASX ETF growing its distribution from 19.9 cents per share in 2013 to 49.6 cents per share in 2022.

And while its trailing yield sits at only ~1.5%, as you see above, this could increase materially over the next decade and help compound your wealth.

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 and iShares International Equity ETFs - iShares Global Consumer Staples ETF. The Motley Fool Australia has recommended iShares S&P 500 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

Cheerful boyfriend showing mobile phone to girlfriend in dining room. They are spending leisure time together at home and planning their financial future.
ETFs

3 strong ASX ETFs I would buy and hold forever

Let's see why these funds could be great options for investors looking to make long term investments.

Read more »

Gold spelt out in gold block letters.
Gold

Should I buy gold ETFs or ASX 200 gold stocks in this environment?

What’s the best way to make money from a fast-rising gold price, ASX gold stocks or ETFs?

Read more »

A man sees some good news on his phone and gives a little cheer.
ETFs

Up 40% in 2025, why this ASX ETF may just be getting started

This ASX ETF has consistently beaten the market.

Read more »

The letters ETF with a man pointing at it.
ETFs

The pros and cons of buying iShares S&P 500 ETF (IVV) this month

Is this leading fund a good buy today?

Read more »

ETF written on wooden blocks with a magnifying glass.
ETFs

2 amazing ASX ETFs I'd buy for market-beating returns

These funds have a lot of potential, in my view.

Read more »

Businessman using a digital tablet with a graphical chart, symbolising the stock market.
Share Market News

$10,000 invested in the ASX 200 5 years ago is now worth…

Guess how much $10,000 invested in the ASX 200 five years ago is worth today!

Read more »

ETF written in yellow with a yellow underline and the full word spelt out in white underneath.
ETFs

10 ASX ETFs to buy in May with $10,000

These funds offer investors access to many of the best companies in the world.

Read more »

Businessman working and using Digital Tablet new business project finance investment at coffee cafe.
ETFs

MOAT ETF is up 10% in 2 weeks. Is this ASX ETF still good value?

Let's see if it is too late to buy this popular fund.

Read more »