If you’re wanting to build an income portfolio but aren’t sure which ASX shares to buy, you could look at the exchange traded funds (ETFs) listed below instead.

These ETFs have been set up with the aim of providing investors with an above-average dividend yield each year. Here’s what income investors need to know about them:

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

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

This clever ETF has been designed to generate attractive quarterly income and reduce the volatility of portfolio returns. In order to deliver on this objective, BetaShares has implemented an equity income investment strategy over a portfolio of shares comprising Wall Street’s famous S&P 500 Index.

This means that the ETF is able to squeeze out more income than you would receive by investing in the companies included in the fund individually. These companies include the likes of Apple, Exxon Mobil, Johnson & Johnson, Microsoft, and United Health.

At the last count, the BetaShares S&P 500 Yield Maximiser was providing investors with a trailing 6.9% distribution yield.

Vanguard Australian Shares High Yield ETF (ASX: VHY)

Another ASX ETF for income investors to consider buying is the Vanguard Australian Shares High Yield ETF.

This is a much simpler ETF and has been designed to provide investors with easy access to a diverse group of ASX shares that brokers are forecasting to provide larger than average dividend yields.

In order to prevent you having a portfolio filled with just miners or banks, Vanguard restricts the proportion invested in any one industry to 40% and 10% for any one company. This means you’ll always be holding a diverse collection of dividend shares with the Vanguard Australian Shares High Yield ETF.

Among the companies included in the fund are giants BHP Group Ltd (ASX: BHP) and Commonwealth Bank of Australia (ASX: CBA), as well as the rest of the big four banks.

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

The post Here are 2 ETFs for ASX income investors to buy for big dividends appeared first on The Motley Fool Australia.

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• 2 high-quality ASX ETFs for income and buy and hold investors
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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 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.

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Thankfully for income investors, there are plenty of dividend stocks to choose from on the ASX 200 index.

But two that could be standout picks for investors right now are listed below. Here’s why analysts rate these big-name dividend stocks as buys:

Telstra Group Ltd (ASX: TLS)

Analysts at Morgans believe that Telstra is an ASX 200 dividend stock to buy right now. The broker has an add rating and $4.70 price target on the telco giant’s shares.

Morgans believes that the company’s outlook is the best it has been in years. It highlights that “[t]elco has the strongest tailwinds in a decade with an increasingly rational market, price rises across the majors and the criticality of telco increasingly recognised.” In addition, it notes that there is “the potential for InfraCo value release following the legal restructure.”

All in all, the broker is expecting this to allow Telstra to pay 17 cents per share fully franked dividends in both FY 2023 and FY 2024. Based on the current Telstra share price of $4.37, this will mean yields of 3.9% for income investors.

Westpac Banking Corp (ASX: WBC)

Over at Goldman Sachs, its analysts say that Westpac is an ASX 200 dividend stock to buy right now. Its analysts currently have the banking giant on their conviction list with a buy rating and $24.67 price target.

Although the broker was disappointed to see Westpac walk away from its cost cutting targets recently, its analysts still expect Australia’s oldest bank to deliver broadly flat costs in the coming years. Which will still be a good outcome in the current environment.

It is for this reason that Goldman expects to “see WBC outperform peers in this relatively difficult inflationary environment.”

Overall, the broker expects this to lead to fully franked dividends of 140 cents per share in both FY 2023 and FY 2024. Based on the current Westpac share price of $21.23, this equates to yields of 6.6% in both years.

The post Buy Westpac and this ASX 200 dividend stock for income: analysts appeared first on The Motley Fool Australia.

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More reading

• 3 reasons to buy Westpac shares now: broker
• With interest rates rising, why have ASX 200 bank shares been pummelled in 2023?
• Better buy: Telstra shares or TPG?
• No savings at 40? Here’s my 3-step plan for $1,500 of passive income a month
• 2 ASX 200 blue chip shares that brokers love

Motley Fool contributor James Mickleboro has positions in Westpac Banking. 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 Telstra Group. The Motley Fool Australia has recommended Westpac Banking. 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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Investing in ASX shares is a great pathway we can all take to building wealth. Shares have shown a consistent ability to generate returns that beat almost all other asset classes over long periods of time. But for a new ASX investor, investing in shares can be more than a little daunting.

There are many mistakes an investor can make, and too often, we have to make those mistakes in order to learn from them. As a one-time beginner investor myself, I have made plenty of those. So today, let’s discuss five things I wish I had learnt before I bought my first stock, in the hope that any new ASX investors out there can avoid following in my footsteps.

5 things I wish I’d known as a new ASX investor

1. You don’t have to start with individual shares

If you tell an older investor that you’re just starting out, you might be subject to some recommendations on which types of shares to buy. Perhaps blue chips like BHP Group (ASX: BHP) or Commonwealth Bank of Australia (ASX: CBA) might come up. Or else Telstra Group Ltd (ASX: TLS) or Woolworths Group Ltd (ASX: WOW).

Choosing which investment to start out with can be intimidating. So I wish I had known that you could avoid all of this hassle by just choosing an index fund to start out with. Index funds work by holding the top 200 or 300 shares of the entire ASX.

Thus, you can get a slice of everything without having to choose anything. Some of the ASX’s most popular index funds include the Vanguard Australian Shares Index ETF (ASX: VAS) and the iShares Core S&P/ASX 200 ETF (ASX: IOZ).

I didn’t start out as a new ASX investor with a fund like this, but I wish I had.

2. Too much of a good thing

Chances are it won’t take long for a new ASX investor to hear about the benefits of diversification or ‘not putting all of your eggs in one basket’. Yes, diversification is a good thing. It can help reduce your portfolio’s risk levels by ensuring that you don’t have all of your cash tied up in just one or two corners of the economy.

But I made the mistake of going too diversified when I first started investing. I needed to have shares from every sector and from every country. This could be described as ‘diworsification’.

If you do this, it will probably lead to mediocre returns and a lot of hassle. So diversify your portfolio by all means, but don’t try and cover every base out there.

3. ASX investors: Never spend your dividends

Compound interest is a marvellous thing to behold – Einstein even allegedly called it the eighth wonder of the world. But the first rule of compound interest is never to interrupt it unnecessarily. Here on the ASX, a good portion of the returns from shares come from dividend payments. Too often, I have seen investors take their dividends and ‘treat themselves’ rather than reinvest them into buying more shares.

You should never think of dividend cash as spending money. It is there to work for you in perpetuity if you let it.

4. Don’t chase fads

This is one of the worst mistakes I see new investors make, and I was guilty of it, too, once upon a time. One of the first things we should all learn about the share market is that there is always a fad – one sector or subsector of the market that everything thinks will be the next hot thing. It could be AI shares, cannabis shares, lithium or copper shares.

You’ll see stories of people making fortunes in these kinds of companies, and you will see share prices going to the moon. But like all bubbles, these fads eventually pop, and the money moves to the next hot thing. Don’t get caught up in one of these fads. It could (and most likely will) be a painful experience. Money is made on the share market over the long term, not overnight.

5. Keep it simple

Often the best companies are those hiding in plain sight. I always ask myself a few simple questions when looking at a company. Is this company loved by its customers? Is it almost certainly going to be bigger, better and more profitable in 10 years’ time? Often it’s these kinds of questions that determine what kind of investment it might be, rather than a company’s price-to-book (P/B) ratio or MACD chart.

Fundamental analysis has its place, but do also ask yourselves which company’s goods or services you use on a daily or weekly basis. That’s as good a place to start on your investing journey as you can get.

The post New ASX investor? 5 things I wish I’d known before I bought my first stock appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has positions in Telstra Group and Vanguard Australian Shares Index ETF. 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 Telstra Group. 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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It was another busy week for Australia’s top brokers. This led to the release of a large number of broker notes.

Three ASX broker buy ratings that you might want to know more about are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

Beach Energy Ltd (ASX: BPT)

According to a note out of Bell Potter, its analysts have retained their buy rating on this energy producer’s shares with a trimmed price target of $2.05. Although the broker was disappointed with delays to Waitsia Stage 2, which it sees as a key component to the company’s near-term production growth, it remains positive. This is due to Beach Energy’s positive outlook thanks to its fully funded production growth plans and its rolling-off peak capex. The broker also has a positive view on the Australian east coast gas and LNG markets. The Beach Energy share price ended the week at $1.37.

Technology One Ltd (ASX: TNE)

Another note out of Bell Potter reveals that its analysts have upgraded this enterprise technology company’s shares to a buy rating with an improved price target of $17.00. Bell Potter believes Technology One is well-placed to deliver a strong half-year result next week and expects more of the same in the coming years. In fact, the broker suspects that the company is growing quicker than expected and may achieve its medium term guidance a year earlier than planned. The Technology One share price was fetching $15.25 on Friday.

Xero Limited (ASX: XRO)

Analysts at Goldman Sachs have retained their buy rating on this cloud accounting platform provider’s shares with an improved price target of $130.00. Goldman Sachs was pleased with Xero’s performance in FY 2023 and believes that there will be more strong growth in FY 2024. In addition, the broker feels that Xero’s expense ratio target of 75% next year is achievable based on its second half performance. The Xero share price was trading at $108.00 on Friday.

The post Top brokers name 3 ASX shares to buy next week appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Brokers name 3 ASX shares to buy now
• Why AUB, Austal, Core Lithium, and Xero shares are pushing higher
• Broker urges investors to buy the dip in the Beach Energy share price for a 50% return
• Xero share price can still rise almost 30% from here: Goldman Sachs

Motley Fool contributor James Mickleboro has positions in Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Technology One and Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool Australia has recommended Technology One. 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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