Buy this ASX ETF for retirement income

If you’re in the process of building a retirement portfolio or adding to one, it may be hard to decide which ASX shares to buy given the recent market volatility.

The good news is that exchange traded funds (ETFs) are here to make your life easier.

An ETF is a diversified collection of assets that combines the benefits of both managed funds and ASX shares and offers investors a simple and cost-effective way to achieve diversification in their investment portfolios.

Among the many ETFs options out there to choose from is one in particular that could be suitable for investors seeking to earn income in retirement. It is the Vanguard Australian Shares High Yield ETF (ASX: VHY).

Why buy this ETF for a retirement portfolio?

Rather than picking some ASX dividend shares to buy, you could just buy the Vanguard Australian Shares High Yield ETF for your retirement portfolio.

This ETF aims to provide investors with access to a portfolio of ASX shares that have higher than average forecast dividends. Vanguard explains:

VHY is built smarter. Unlike most high yield equity ETFs, VHY uses forward looking broker estimates to determine which securities go in the fund. This ensures VHY can look past historical information and capture the securities that are forecast to pay a higher yield.

There are a number of high quality ASX 200 shares included in the ETF. This includes income investor favourites such as BHP Group Ltd (ASX: BHP), National Australia Bank Ltd (ASX: NAB), and Wesfarmers Ltd (ASX: WES).

At present, the ETF provides investors with a forecast dividend yield of 5.4%. This is well ahead of the Australian share market historical average of approximately 4%.

The post Buy this ASX ETF for retirement income appeared first on The Motley Fool Australia.

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More reading

• Is a dividend ETF really better than an ASX index fund for income?
• These ETFs could be top options for buy and hold investors
• Income investors could get very big dividends from these ASX ETFs
• Buy this ASX ETF for big retirement income
• Dividend dessert: Which ASX ETFs are the sweetest for a passive income?

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 Wesfarmers. 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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