2 high-quality ASX ETFs I’d buy for impressive passive income

I’m always on the lookout for investments on the ASX that could provide passive income. One of the areas we can find opportunities is the ASX-listed exchange-traded fund (ETF) space.

I think it’s important to have a diversified portfolio – don’t just rely on one underlying business for dividends. An ASX ETF can provide exposure to dozens, hundreds or even thousands of companies.

But, many ASX ETFs focused on international shares have a fairly low dividend yield because the underlying companies have low yields, which makes it harder to invest in them for passive income seekers, even if they do own great companies. Below are two of my favourite ideas for passive income from ASX ETFs.

WCM Quality Global Growth Fund (ASX: WCMQ)

This ASX ETF aims to deliver investors an annualised distribution yield of at least 5%, which I think is a very good yield. It’s not too high, but it’s still very rewarding compared to the dividend yields of most ASX ETFs.

The fund looks across the global share market for opportunities. Currently, 56% of the portfolio comes from the Americas, which is substantially less than what the actual global share market’s allocation is, so I think it provides better diversification geographically.

WCM’s investment process is based on the belief that corporate culture is the biggest influence on a company’s ability to grow its competitive advantage (economic moat). I think a growing economic moat improves the company’s ability to generate stronger profit margins.

Between the ASX ETF’s inception in August 2018 and March 2026, it has delivered an average return of 14% per year. That’s high enough for the fund to both pay the 5% distribution yield and deliver capital growth with the retained returns as the net asset value (NAV) rises. Of course, past performance is not a guarantee of future performance.

Montaka Global Fund (ASX: MOGL)

This is a fund operated by the fund manager Montaka Global Investments, which is now ultimately owned by MFF Capital Investments Ltd (ASX: MFF).

The fund aims to invest in high-quality global companies that are well-positioned to benefit from major long-term industry trends and are priced below what Montaka thinks it’s worth.

In terms of the passive income, it targets a 4.5% distribution yield per annum, paid half-yearly.

Its performance in the last few months has been impacted by the sell-off of the share market following the Middle East conflict and the tech pain caused by AI worries. Even so, in the three years to March 2026 it produced an average return of 14%.

Some of its current largest holdings include Amazon, Microsoft, Meta Platforms, Alphabet, KKR, TSMC, Tencent and BAE Systems.

These picks are trying to take advantage of a few different key themes including cloud computing, ‘discovery engines’, enterprise software, digital marketplaces and private assets.

I believe this investment style can deliver good total returns over the long-term while still delivering pleasing passive income along the way.

The post 2 high-quality ASX ETFs I’d buy for impressive passive income appeared first on The Motley Fool Australia.

More reading

• I’m planning to buy loads of these ASX ETFs for my retirement
• Which ASX ETFs I’d buy for retirement investing
• Why I’m planning to make this my biggest ASX ETF holding

Motley Fool contributor Tristan Harrison has positions in Mff Capital Investments and Wcm Quality Global Growth Fund. 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 Mff Capital Investments. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.