Searching for the perfect retirement ETF? These two might fit the bill as monthly income providers

Retirees are often looking for companies or other entities that pay out regular, fully-franked dividends, which can supply a solid, and hopefully low-risk income stream.

Betashares recently shared its investing ideas for 2026, and among them were two exchange-traded funds (ETFs) they offer, which they say are set up to deliver just that.

So let’s have a look at the ETFs they are recommending for income investors.

Betashares Australian Enhanced Credit Income Complex ETF (ASX: ECRD)

The name of this  ETF is quite a mouthful, but to put it in simple terms, it invests in a portfolio of bonds issued by the “Big four” Australian banks and Australian investment-grade corporate bonds.

The ETF’s managers also seek to increase returns by borrowing, with its strategy in its own words, “using a combination of investors’ money and funds borrowed at institutional rates to enhance income potential, with all gearing managed within the fund and no risk of investor margin calls”.

The Betashares website goes on to say:

The gearing ratio of between 66.7% and 71.4% means that the fund’s geared exposure is anticipated to vary between about 300% and 350% of the fund’s net asset value on a given day. The fund’s portfolio exposure is actively monitored and adjusted to stay within this range.  

Betashares does warn that a geared investment might not suit everyone’s risk profile.

Gearing magnifies gains and losses and may not be a suitable strategy for all investors. Investors in geared strategies should be willing to accept higher levels of investment volatility and potentially large moves (both up and down) in the value of their investment. 

ECRD is set up to pay out dividends on a monthly basis and has a running yield of 7.68% per annum, although the fund was only set up in November, so there’s not a lot of historical data to go on.

Betashares S&P Australian Shares High Yield ETF (ASX: HYLD)

This Australia-focused ETF has a monthly trailing dividend yield of 4.55%, and according to the Betashares website, a total return over the past year of 11.79% against the S&P/ASX 200 Index (ASX: XJO)’s 5.47%.

HYLD provides exposure to the top 50 Australian companies, but does not aim to buy them all.

As is explained on the Betashares website:

HYLD seeks to improve on traditional high-dividend strategies by aiming to screen out potential ‘dividend traps’ such as companies projected to pay unsustainably high dividend yields, as well as companies that exhibit high levels of volatility relative to their forecast dividend payout. HYLD can be used as an investor’s core Australian shares exposure, aiming to provide higher income than the broad Australian share market, and the potential to outperform the S&P/ASX 200 Index.

The ETF’s top three holdings are ANZ Group Holdings Ltd (ASX: ANZ), Westpac Banking Corp (ASX: WBC) and National Australia Bank Ltd (ASX: NAB), followed by the miners BHP Group (ASX: BHP) and Rio Tinto (ASX: RIO).

HYLD pays its fully-franked dividend in the first week of each month.

The post Searching for the perfect retirement ETF? These two might fit the bill as monthly income providers appeared first on The Motley Fool Australia.

More reading

• Own Betashares ASX ETFs? Here’s your next dividend
• 3 ASX ETFs to generate passive income in retirement
• 3 ASX ETFs to buy for passive income in December

Motley Fool contributor Cameron England 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 BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.