With interest rates starting to shift lower, income investors may soon find it harder to lock in the generous term deposit rates that have been available in recent years.
But don't worry, because there are high-yield ASX exchange-traded funds (ETFs) out there that could be an attractive alternative.
Let's take a look at three ASX ETFs that could be worth considering.
Image Source: Getty Images
Nasdaq 100 Yield Maximiser Fund (ASX: QMAX)
If you want exposure to some of the world's most dominant technology companies but also want a strong income stream, the Nasdaq 100 Yield Maximiser Fund could be worth a look according to Betashares.
This ASX ETF provides investors with access to the top 100 companies on the Nasdaq, including global giants like Apple (NASDAQ: AAPL), NVIDIA (NASDAQ: NVDA), Meta (NASDAQ: META), Tesla (NASDAQ: TSLA), and Costco (NASDAQ: COST).
However, unlike a standard Nasdaq-tracking fund, QMAX employs a covered call strategy to generate additional income. This strategy involves selling call options on the fund's holdings, allowing it to collect premium income while maintaining exposure to share price movements.
As a result, the fund offers a higher-than-average trailing dividend yield of 5.7%, with dividends paid quarterly.
Australian Top 20 Equity Yield Maximiser Fund (ASX: YMAX)
For those looking to generate strong income from local ASX shares, the YMAX Australian Top 20 Equity Yield Maximiser Fund could be a smart addition to a portfolio. This ASX ETF focuses on Australia's largest 20 listed companies, providing exposure to blue-chip stocks across sectors like financials, materials, and healthcare.
Its portfolio includes household names such as BHP Group Ltd (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA), CSL Ltd (ASX: CSL), and Wesfarmers Ltd (ASX: WES), giving investors exposure to some of the most established and stable dividend-paying companies on the Australian share market.
Like QMAX, this fund also utilises a covered call strategy to boost income. This makes it particularly appealing for investors who prioritise yield over potential capital gains. Especially with its 12-month trailing distribution yield of 7.7%, with dividends paid quarterly. Betashares recently tipped it as a buy for income investors.
Australian Bank Senior Floating Rate Bond ETF (ASX: QPON)
Finally, if you're looking for income with lower risk, then the Australian Bank Senior Floating Rate Bond ETF could be a top option. Unlike the first two ASX ETFs, which focus on equities, QPON provides exposure to senior floating-rate bonds issued by major Australian banks.
Floating-rate bonds are a great way to generate defensive income, as they typically offer capital stability and are less exposed to market volatility. This fund primarily holds bonds issued by Australia's big four banks, which have historically been among the safest fixed-income investments.
Importantly, senior bonds rank higher than both hybrid securities and equities in a bank's capital structure. This means that in the rare event of a bank default, bondholders would be prioritised for repayment over shareholders.
It offers a 12-month trailing distribution yield of 5.5%, with dividends paid monthly. It was also named as one to buy for income investors.
