Buy these ETFs for an income in retirement

If you’re wanting to build a retirement portfolio filled with dividend shares but aren’t sure which ones to buy, you could consider exchange traded funds (ETFs).

There are a number of ETFs out there that have been designed to give investors access to a group of dividend shares through a single investment.

Two that could be worth considering for a retirement portfolio are listed below. Here’s what you need to know about them:

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

The BetaShares S&P 500 Yield Maximiser could be a top option for a retirement portfolio. This ETF has been designed to generate attractive quarterly income and reduce the volatility of portfolio returns at the same time.

The ETF aims to achieve this through the implementation of an equity income investment strategy over a portfolio of shares comprising the S&P 500 Index. These are 500 of the largest companies listed on Wall Street. This includes dividend-payers such as Apple, Exxon Mobil, and Walmart.

The BetaShares S&P 500 Yield Maximiser’s units currently provide investors with an 8.8% distribution yield.

Vanguard Australian Shares High Yield ETF (ASX: VHY)

The Vanguard Australian Shares High Yield ETF is another top ETF for income investors to consider for a retirement portfolio.

The ETF provides investors with low-cost exposure to companies listed on the Australian stock exchange that have higher forecast dividends relative to other ASX-listed companies.

But don’t worry, you won’t end up with a portfolio filled with coal and iron ore miners! That’s because the ETF restricts the proportion invested in any one industry to 40% and 10% for any one company. In addition, Australian Real Estate Investment Trusts (A-REITS) are excluded from the index.

Vanguard notes that this ensures that income investors are holding a diverse collection of dividend shares. Among the 70 shares included in the portfolio you’ll find the likes of BHP Group Ltd (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA), Telstra Corporation Ltd (ASX: TLS), and Wesfarmers Ltd (ASX: WES).

The Vanguard Australian Shares High Yield ETF is currently trading with an estimated forward dividend yield of 5.9%.

The post Buy these ETFs for an income in retirement appeared first on The Motley Fool Australia.

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More reading

• 2 popular ETFs for ASX investors to buy next week
• 2 ETFs for ASX investors to buy for big dividends
• These ASX dividend shares have big yields

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, Telstra Corporation Limited, and Wesfarmers Limited. 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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