Month: October 2022

If you’re wanting to strengthen your portfolio with some ASX 200 blue chip shares, you may want to look at the two listed below.

Both of these high quality blue chip shares have been beaten down this year, which could have created a buying opportunity for long term-focused investors.

Here’s why analysts think they could be blue chip shares to buy right now:

Goodman Group (ASX: GMG)

The first blue chip ASX 200 share to look at is Goodman Group. This leading integrated commercial and industrial property company’s shares have fallen over 40% since the start of the year.

This is despite the company’s strong performance continuing in FY 2022 and its guidance for further solid growth this financial year.

And with demand for its property, which includes warehouses, data centres, large scale logistics facilities, and business and office parks, expected to remain robust, Goldman Sachs is recommending investors take advantage of the weakness to buy its shares. It recently commented:

We expect solid rental growth as demand for high quality logistics space continues to outpace available supply. Although the macro environment remains challenged, we believe there is upside risk to its conservative guidance as the Group has historically “Guided light”, coming in ahead of initial estimates. Given GMG’s preference to own, develop and manage high-quality industrial assets in key infill markets globally, we believe it is well-positioned to capture market rental growth, which when coupled with elevated investment demand for industrial assets will assist in contributing to AUM growth over time.

Goldman currently has a buy rating and $25.40 price target on the company’s shares. Based on the latest Goodman share price of $15.92., this suggests potential upside of almost 60%.

SEEK Limited (ASX: SEK)

Another blue chip ASX 200 share that has been beaten down is job listings giant Seek. Since the start of the year, its shares have also tumbled 40%.

This has caught the eye of analysts at Morgans, which believe the company is one of the best options for investors on the ASX 200 index right now.

Its analysts commented:

Of the classifieds players, we continue to see SEEK as the one with the most relative upside, a view that’s based on the sustained listings growth we’ve seen over the period. The tailwinds that have driven elevated job ads (~250k currently, +35% on pcp) and strong FY22 result appear to still remain in place, i.e. subdued migration, candidate scarcity and the drive for greater employee flexibility. With businesses looking to grow headcount in the coming months and job mobility at historically high levels according to the RBA, we see these favourable operating conditions driving increased reliance on SEEK’s products.

Morgans has an add rating and $29.40 price target on its shares. Based on the current Seek share price, this implies potential upside of almost 50% for investors over the next 12 months.

The post Analysts say these beaten down blue chip ASX 200 shares can rise 50% appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Goodman share price hits two-year low: Time to buy?
• Why Dubber, Johns Lyng, Seek, and St Barbara shares are sinking today
• 5 things to watch on the ASX 200 on Monday
• 2 high quality blue chip ASX 200 shares that experts rate as buys

Motley Fool contributor James Mickleboro has positions in SEEK Limited. 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 recommended SEEK Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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If you’re wanting to invest in the mining sector, then you may want to look at the ASX 200 shares listed below.

These mining shares have recently been tipped as buys by analysts at Bell Potter. Here’s what the broker is saying:

Chalice Mining Ltd (ASX: CHN)

This mineral exploration company could be a mining share to buy according to Bell Potter.

It is a fan of the company due to its Julimar PGE-Ni-Cu-Au project in Western Australia, which is home to the hugely promising Gonneville deposit. Last year this deposit was confirmed as a world class discovery.

The broker also notes that recent drilling appears to indicate that the resource could be even larger than expected. It commented:

CHN has reported that drilling to test the results of a recently completed 2D seismic survey has successfully intersected the interpreted extension of the Gonneville deposit. […]  In our view, the drilling achieves two objectives: i.) confirms the material extension of Gonneville intrusion to the north, where it remains open; and ii.) validates seismic surveys as a highly effective exploration tool, particularly in combination with EM methods.

Bell Potter has a speculative buy and $11.73 price target on the company’s shares.

Nickel Industries Ltd (ASX: NIC)

Another ASX mining share that Bell Potter is bullish on its Nickel Industries.

The broker notes that it is emerging as a globally significant, low cost producer of nickel pig iron, which is a key ingredient in the production of stainless steel.

And with its shares currently trading at a 52-week low, the broker sees plenty of value here for investors. It recently commented:

While margins are proving to be more volatile than forecast, the underlying operations continue to demonstrate their profitability. NIC’s assets are long-life, bottom-of-the-cost-curve projects and are currently being priced for margins at the low point of the cycle. We expect NIC to continue to make money through this period and be highly leveraged to expanding margins as they recover. As such, we believe NIC is excellent value at these levels.

Bell Potter has a buy rating and $1.83 price target on its shares.

The post Broker names the ASX 200 mining shares to buy now appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Here are the top 10 ASX 200 shares today
• Here are the top 10 ASX 200 shares today
• Why Chalice Mining, Core Lithium, Corporate Travel Management, and NIB are rising
• Why is the Chalice Mining share price up 10% and the best performer on the ASX 200 today?

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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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As most investors would be acutely aware, 2022 has been a tough year for the markets. Year to date, the S&P/ASX 200 Index (ASX: XJO) has gone backwards by a nasty 12% or so.

That might put many investors off buying shares. These are uncertain times, after all.

But one investor has instead been buying up big. That would be the legendary Warren Buffett, of Berkshire Hathaway Inc (NYSE: BRK) fame.

As our Fool colleagues over in the US covered recently, Buffett has been spending big over the year so far. And one of his favourite shares to buy has been a dividend stock.

Buffett reportedly acquired 2.4 million shares of oil giant Chevron over the second quarter of 2022. Those 2.4 million shares would be worth approximately US$405.5 million on the latest pricing.

That brought Berkshire’s total holdings to 163.5 million shares, representing an 8.4% ownership of the entire company. That’s a stake worth more than US$27 billion.

Our Fool colleagues report that Buffett’s company will now enjoy almost US$929 million in dividend income per annum from this investment.

Following Buffett’s dividend example

Buffett’s enthusiasm for this dividend share highlights the value of a solid dividend payer during uncertain times. While share prices may fluctuate, nothing is more concrete than receiving hard cash.

As we discussed this morning, market volatility, even crashes, can be the discerning investor’s best friend. This is doubly true when it comes to dividend shares.

This is because the lower a dividend share’s price gets, the higher starting yield an investor can potentially enjoy. Take the Commonwealth Bank of Australia (ASX: CBA) share price.

Over 2022 thus far, CBA shares have endured significant volatility, having fluctuated between $108.35 and $86.98 a share this year. But CBA has still been raising its dividend consistently since 2020. Its two most recent dividend payments add up to $3.85 in dividends per share.

For an investor buying in at $108.35, this would give them a dividend yield of 3.55% on their capital. But if that same investor was braver and bought up at $86.98, they would be rewarded with a far better yield of 4.43% on their capital.

So it’s for this reason that all investors should strive to buy quality dividend shares at the lowest price possible. It’s one of the reasons Warren Buffett is one of the richest investors in the world, after all.

The post Warren Buffett has been buying up big on dividend stocks. Should you? appeared first on The Motley Fool Australia.

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More reading

• ASX dividend shares or distribution shares? Is there even a difference?
• No savings at 40? I’d use the Warren Buffett method to build wealth
• What could CBA shares stand to gain from a Tyro takeover?
• ASX dividend shares ‘likely to remain attractive’ despite rising bank deposit rates: expert
• How bear markets can be a blessing for dividend investors

Motley Fool contributor Sebastian Bowen has positions in Chevron. 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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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One investment management company has decided to cut NAB shares and buy up another ASX 200 bank share instead.

National Australia Bank Ltd (ASX: NAB) shares finished trading down 1.54% at $31.40 on Friday. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) finished Friday down 0.80%.

Let’s take a look at which ASX 200 bank share this fundie recommends.

Virgin Money

NAB may be one of the big four banks in Australia, but Allan Gray Australia has decided to add Virgin Money Uk Plc (ASX: VUK) to its equity fund instead. Virgin Money shares closed flat on Friday at 2.25.

Investment specialist Julian Morrison said Virgin Money, along with QBE Insurance Group Ltd (ASX: QBE) has been added to the portfolio “on weakness”.

Morrison said Allan Gray Australia sold its last exposure to NAB shares in the September quarter.

Commenting on this decision in a September 2022 quarterly review, Morrison added:

Virgin Money faces some challenges – hence the depressed share price. But with the price reflecting around 0.5 times net tangible asset (NTA) value, the company is at a very material discount to other banks and factors in a significant margin of safety.

By comparison, CBA and NAB trade on a price-to-NTA multiple of around 2 and 1.7 times
respectively.

The Allan Gray Australia Equity Fund also includes exposure to Australia and New Zealand Banking Group Ltd (ASX: ANZ), Westpac Banking Corporation (ASX: WBC) and AMP Ltd (ASX: AMP). Morrison said:

Elsewhere in financials, AMP bucked the trend and contributed very strongly to outperformance. We also had positive contribution from exposures to ANZ and Westpac.

However, Macquarie analysts recently recommended investors buy the NAB share price. Analysts have placed a $32.25 price target on NAB shares. Out of all the big four banks, Macquarie sees NAB as the best bank to buy.

Share price snapshot

NAB shares have risen 9% in the past 12 months and the year to date. Meanwhile, Virgin Money shares have fallen 39% in the past year and 32% in the year to date.

In comparison, the ASX 200 has shed 10% in the past year and year to date.

The post Ditching NAB for this ASX 200 bank share instead: fundie appeared first on The Motley Fool Australia.

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More reading

• ASX dividend shares ‘likely to remain attractive’ despite rising bank deposit rates: expert
• Are NAB shares a good ASX 200 investment right now?
• Here are the top 10 ASX 200 shares today
• What could a possible Tyro takeover mean for NAB shares?
• Leading brokers name 3 ASX shares to buy today

Motley Fool contributor Monica O’Shea 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 recommended Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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As a big fan of buy and hold investing, I like to look at how investments in some ASX shares would have fared if you’d made a patient investment over a period of 10 years.

On this occasion, I’m going to focus on Pro Medicus Limited (ASX: PME). It is a leading health imaging technology provider that was founded back in 1983.

Pro Medicus provides a range of software and services to hospitals, imaging centres, and health care groups across Australia, Europe, and North America. This includes radiology information systems (RIS), Picture Archiving and Communication Systems (PACS), and advanced visualisation solutions.

The company notes that these high quality products combine speed, scalability, stability and smarts to help eliminate administrative tasks and workarounds, optimise the efficiency of clinical and administrative staff, and ultimately maximise profits for its users.

Their increasing popularity has also helped Pro Medicus maximise its own profits, with the company delivering consistently strong profit growth for years.

So how much would a $10,000 investment in this ASX share be worth now?

Since this time in 2012, despite what the world has thrown at the share market and particularly richly valued tech stocks, Pro Medicus’ shares have generated a mind-boggling average total return of 59.3% per annum.

This means that if you were lucky enough to invest $10,000 into this ASX share in 2012, your investment would have grown 100 times over and be worth $1.05 million today.

But the returns may not even stop there! Analysts at Bell Potter currently have a buy rating and $55.00 price target on its shares.

The broker believes Pro Medicus can grow its net profit after tax from $44.9 million in FY 2022 to $114.2 million in FY 2025. That’s an increase of over 150% in the space of three financial years.

If only all investments could be like Pro Medicus!

The post This ASX 200 share turned $10k into $1 million in just 10 years appeared first on The Motley Fool Australia.

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More reading

• This ASX 200 share has ‘all the qualities of a compounder’: experts
• Morgans names 2 of the best ASX growth shares to buy now
• Why dividends matter

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 positions in and has recommended Pro Medicus Ltd. The Motley Fool Australia has positions in and has recommended Pro Medicus Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Are Flight Centre Travel Group Ltd (ASX: FLT) shares worth buying this October? Good question!

One thing I think we can all agree on is that we have moved on from the COVID era of travel restrictions. Australians are back out exploring the world and many ASX travel shares are loving it. Just this week, we saw Qantas Airways Limited (ASX: QAN) shares surge to a new post-COVID high of over $6.

But sadly for Flight Centre investors, we haven’t seen quite the same level of enthusiasm. Flight Centre closed at $15.36 a share today. That’s almost a third off of the $23-per-share value the company was commanding just five months ago. At least it’s around 10% above the 52-week low of $13.86 that we saw earlier this month.

Plenty of investors may have made some money off of these recent falls too. That’s because this ASX travel share has frequently found itself on the list of the share market’s most short-sold shares in recent months.

So where are Flight Centre shares flying to next? Let’s see what some ASX experts reckon.

Are Flight Centre shares set to soar?

As my Fool colleague Bronwyn reported on earlier this week, brokers at Macquarie reckon that a positive catalyst for Flight Centre may be inbound thanks to a trading update at the company’s upcoming annual general meeting on 14 November:

Macquarie said unemployment rates were still very low and “consumer spending has not declined as feared” in Australia and that could also help travel groups such as Flight Centre.

Earlier this month, my Fool colleague Brooke also looked at a positive rating on the Flight Centre share price that another broker in Morgans gave the company earlier this year.

This broker liked what it saw in Flight Centre’s FY2022 results and expects a “strong recovery” this financial year. Although it gave the company a hold rating, it also slapped a 12-month share price target of $18.25 on Flight Centre sales.

Yet clearly opinions are still somewhat dividend on the Flight Centre share price, judging by the ongoing short-seller interest. No doubt this ASX travel share will be one to watch going forward.

The post Are Flight Centre shares worth buying in October? appeared first on The Motley Fool Australia.

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More reading

• Why the heavily shorted Flight Centre share price could be an outperformer: Macquarie
• These are the 10 most shorted ASX shares
• What is the outlook for ASX travel shares for the rest of 2022?
• Why are Flight Centre shares still the most popular among ASX short-sellers?
• Here are the 10 most shorted ASX shares

Motley Fool contributor Sebastian Bowen 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 recommended Flight Centre Travel Group Limited and Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Ever since the tide turned against growth stocks late last year, investors have flocked to dividend shares for (relative) safety.

The idea is that if share prices aren’t going up, you might as well get some income back as compensation for having your money tied up.

The great advantage for Australian investors is that the ASX is one of the world’s best for dividend investing.

That’s because of Australia’s tax rules that favour dividends over other ways of capital return, such as share buybacks.

The two sectors that dominate the ASX, mining and banks, both make wide use of dividends and franking to make themselves more attractive to investors.

So that’s all great, but how do you take advantage?

If you’re willing to put in some work, some investors practise what’s known as “dividend stripping”. Marcus Today founder Marcus Padley explained what this is in a recent blog post.

How to perform dividend stripping

The general principle of stripping is to buy the stock before the ex-dividend date, harvest the income, then sell it off.

But it’s not just a short term play. Padley pointed out that holding for a reasonable amount of time is required for a number of reasons.

“Remember the 45-day rule…. This says that you need to hold a stock for 45 days not including the buy or sell date to qualify for the franking credit,” he said.

“So buying 45 days before a stock goes ex-dividend makes sense and doing so will usually catch the pre dividend run if there is one.”

ASX shares that have an ex date approaching soon usually see their price rise due to the numerous investors who are seeking to harvest that dividend.

So shrewd investors will want to buy nice and early, before the herd starts doing the same.

You need to be careful

One warning from Padley is that the ASX shares you buy for dividend stripping still need to be quality stocks that you’d be willing to hold on for a long time.

That’s because things might not go to plan — like the stock price plummets or the company decides to reduce its dividend payout. 

“Only buy stocks for the dividend that you would be quite happy to hold a bit longer if the strategy went oblong in the short term.”

The other tip is to go for reliable dividend payers — not businesses that are putting out a massive one-off dividend.

That’s because the stock price fall after the ex date is usually dramatic for the one-off payers from all the dividend strippers running for exits.

And never buy a stock purely for income.

“Income alone means nothing if capital is leaking out of the back door. Anyone can pay a high yield out of capital,” said Padley.

“Making money in dividend stocks means trying to make money in the stock as well as from the dividend.”

The post How to buy ASX dividend shares for income stripping appeared first on The Motley Fool Australia.

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More reading

• Are Flight Centre shares worth buying in October?
• Demolished ASX 200 materials shares: Why this fundie is buying the 30% dip
• ASX dividend shares or distribution shares? Is there even a difference?
• These could be the ETFs to buy for big dividends
• Analysts name 2 ASX 200 dividend shares to buy this month

Motley Fool contributor Tony Yoo 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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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ASX 200 materials shares, Alumina Limited (ASX: AWC) and Newcrest Mining Ltd (ASX: NCM) both have “depressed share prices that are far below our assessment of fair value and we have added to both on weakness during the last quarter”.

That’s the assessment of fund manager Allan Gray on these two S&P/ASX 200 Index (ASX: XJO) stalwarts.

The fundie has been buying the dip on these two ASX 200 materials shares over the past quarter.

The team explains why in its latest quarterly report.

ASX 200 materials shares performed worst in September

In its September 2022 quarterly commentary, Allan Gray said Alumina shares and Newcrest shares were the greatest lags on the performance of its flagship Australia Equity Fund.

The companies are the equity fund’s two biggest holdings within the ASX 200 materials sector. They’re also the fund’s second and third largest positions, each representing 8% of the fund’s weighting.

(Fun fact: Woodside Energy Group Ltd (ASX: WDS) is the no. 1 holding at 10% of the fund’s weighting.)

Allan Gray holds $176.3 million worth of Newcrest shares. It holds $168.8 million in Alumina shares.

Allan Gray investment specialist, Julian Morrison, explains their view on the ASX 200 materials shares:

During the quarter, our positioning in the Materials sector was the largest detractor from relative performance, with Newcrest Mining the leading negative contributor, followed by Alumina.

Both companies have competitive advantages in terms of long reserve life, and lower cost of production relative to competitors.

Alumina faces some negative market sentiment with regard to surplus industry production currently, but their competitors have much higher cost of production and so face significant short-term losses, while Alumina is better placed in this regard.

Rational curtailment of production by competitors would seem a likely outcome, and in due course Alumina could be a beneficiary of this.

Alumina shares and Newcrest shares dip 30%-plus

Over the September quarter, the Newcrest share price lost 19% of its value. It is down 31% in 2022 so far. Newcrest shares closed up 0.42% at $16.88 on Friday.

The Alumina share price dropped by 14% in the September quarter and is down 35% in 2022. Alumina shares closed 2.83% higher at $1.27 on Friday.

Morrison added:

Today, we believe extreme difference in valuations remain across the sharemarket. Our approach is to position the Fund in our assessment of the most undervalued stocks versus long-term value.

We believe this not only maximises the opportunity for long-term outperformance, but can also help mitigate the risk of permanent loss of capital, which stems from overpaying.

The post Demolished ASX 200 materials shares: Why this fundie is buying the 30% dip appeared first on The Motley Fool Australia.

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More reading

• Why did the IAG share price get smashed today?
• Here are the 3 most heavily traded ASX 200 shares on Friday
• Can ASX 200 gold shares bank on a higher gold price in 2023?
• Why have Medibank shares just been suspended from trading on the ASX?
• Buffett: Why a market crash can be an investor’s best friend

Motley Fool contributor Bronwyn Allen has positions in Alumina Ltd. 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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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ASX dividend shares have regained their shine in 2022.

That’s come as rapid interest rate rises from the Reserve Bank of Australia (RBA), the US Federal Reserve and other global central banks have made it harder to invest in stocks for potential share price gains. As illustrated by the 12% decline in the S&P/ASX 200 Index (ASX: XJO) year to date.

And with inflation still hitting investors where it hurts, ASX dividend shares paying healthy yields are finding stronger support.

As Kristiaan Rehder, portfolio manager of the Bennelong Kardinia Absolute Return Fund, told The Motley Fool this week, “Kardinia is very focused on dividends. Particularly fully franked dividends.”

In our interview (to be published in full next week) Rehder noted:

To illustrate the importance of dividends to the Australian market, if you look at the S&P/ASX 300 Index (ASX: XKO), that’s returned about 2.8% per annum over the last five years.

If you compare that to the ASX 300 accumulation index, which includes dividends, it’s around 6.8%. So that 4% difference per annum is all to do with dividends.

Is there a difference between ASX dividend shares and distribution shares?

ASX shares that pay out regular dividends or distributions both return some of their profits to shareholders. If those payouts are franked, investors also get credit from the ATO for the taxes the company has already paid on its profits.

Some well-known names and popular ASX dividend shares include BHP Group Ltd (ASX: BHP) and Commonwealth Bank of Australia (ASX: CBA).

At the current share price, CBA pays a 3.8% trailing dividend yield, fully franked.

With its monster dividend payout earlier this year, BHP pays a trailing yield of 11.8%, also fully franked.

So how about distributions?

ASX distribution shares differ from dividend shares in that you’ll get distributions from a real estate investment trust (REIT) or an exchange-traded fund (ETF).

Unibail-Rodamco-Westfield (ASX: URW), for example, is a REIT focused on shopping malls across much of the world. It pays an 8.9% unfranked distribution yield.

Then there’s Centuria Industrial REIT (ASX: CIP). The REIT owns a range of distribution centres, manufacturing facilities, and data centres across Australia and pays a distribution yield of 6.2%, also unfranked.

Some REITs offer franking credits on their distributions, while not all ASX dividend shares will do so.

As for ETFs, any franking credits on their distribution payouts will depend on whether the fund holds Australian companies paying taxes Down Under.

Atop potential tax variations, a core difference between ASX dividend shares and those that pay distributions is that distribution payments are based on profits earned during the current financial year. And those distributions are paid out during that financial year.

While these differences are important to understand, at the end of the day, most investors will be happy to see the extra income dropping into their bank accounts.

The post ASX dividend shares or distribution shares? Is there even a difference? appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben 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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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As well as giving investors exposure to global markets, exchange traded funds (ETFs) can be used by investors looking for income.

That’s because some ETFs have been set up to give investors access to large groups of dividend shares through a single investment.

Two such ETFs are listed below. Here’s why they could be top options for income investors:

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

The first ETF that could be a top option for income investors is the BetaShares S&P 500 Yield Maximiser.

This ETF has been designed to give investors access to the top 500 companies listed on Wall Street. But thanks to its ‘covered call’ strategy, the actively managed fund is expected to earn quarterly income that is significantly greater than the dividend yield of the underlying share portfolio over the medium term.

Among the companies included in the fund are giants such as Apple, Exxon Mobil, Johnson & Johnson, Microsoft, and Walmart.

At the last count, its units were providing investors with a trailing 6.6% distribution yield.

Vanguard Australian Shares Index ETF (ASX: VAS)

Another ETF for investors to consider for dividends is the Vanguard Australian Shares Index ETF.

Although this ETF isn’t necessarily designed with dividends in mind, a large number of shares included in the fund pay dividends, which has led to it providing a bumper dividend yield again this year.

The Vanguard Australian Shares Index ETF gives investors the ability to invest in 300 of the largest companies on the Australian share market.

This means you’ll be buying miners like BHP Group Ltd (ASX: BHP), banks such as Commonwealth Bank of Australia (ASX: CBA), and retailers as small as Adairs Ltd (ASX: ADH) and as large as Woolworths Group Ltd (ASX: WOW).

Last week the ETF paid out its latest quarterly dividend of 145.0577 cents per unit. This took its total dividends paid over the last 12 months to approximately $6.30 per unit, which equates to a yield of 7.6%.

The post These could be the ETFs to buy for big dividends appeared first on The Motley Fool Australia.

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More reading

• The Vanguard Australian Shares ETF has doled out record dividends this year. Here’s why
• The Vanguard Australian Shares Index ETF dividend is being paid today. Here’s the lowdown
• If I’d invested $5,000 in Vanguard’s VAS ETF at the start of 2022, here’s what I’d have now
• Why dividends matter
• Dividends, dividends, dividends! 2 ASX ETFs to buy now

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&P500 Yield Maximiser. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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