The good news for income investors is that there are a number of exchange traded funds (ETFs) that have been set up to provide access to large groups of dividend shares through a single investment.
Two such ETFs are listed below. Hereâs why they could be top options for income investors:
BetaShares S&P 500 Yield Maximiser (ASX: UMAX)
The BetaShares S&P 500 Yield Maximiser could be a top option for income investors.
This ETF give investors exposure to the 500 largest companies listed on Wall Street. And while the S&P 500 index doesn’t have the biggest average yield, this ETF’s âcovered callâ strategy changes all of that.
That’s because using the strategy, the ETF 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 time of writing, its units were providing investors with a trailing 6.6% distribution yield.
Vanguard Australian Shares High Yield ETFÂ (ASX: VHY)
The Vanguard Australian Shares High Yield ETF is another ETF that could be a good option for income investors.
There’s nothing particularly fancy about the way this ETF is run, it simply does exactly what it says on the tin. It provides investors with exposure to ASX-listed shares that have higher than average forecast dividends.
One thing the ETF does do, though, is restrict the proportion invested in any one industry to 40% and 10% for any one company. This ensures that investors are holding a diverse collection of dividend shares.
Included in the fund are the likes of BHP Group Ltd (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA), and Telstra Corporation Ltd (ASX: TLS).
The Vanguard Australian Shares High Yield ETF currently trades with an estimated forward dividend yield of 6.3%.
The post 2 ETFs for ASX investors to buy for big dividends appeared first on The Motley Fool Australia.
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*Returns as of November 7 2022
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More reading
- These 10 predictions could help you profit from the stock market regardless of inflation, interest rates or even another bear market
- How regularly does the Vanguard Australian Shares ETF (VAS) pay dividends?
- Is the Vanguard Australian Shares ETF fighting off inflation?
- Why did the Vanguard Australian Shares Index ETF perform strongly in October?
- 2 excellent ETFs for ASX investors in November
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 and Telstra Corporation 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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