Investing in ASX shares for passive income?
You may want to run your slide rule over the Betashares Australian Dividend Harvester Fund (ASX: HVST).
Hereâs why.
High-yielding ASX share with instant diversification
As with most exchange-traded funds (ETFs), HVST provides investors diverse exposure with a single investment.
The ETF holds 40 to 60 different ASX shares at any given time.
Betashares Australian Dividend Harvester Fundâs top holdings by sector are in the financials sector (30%), the materials sector (24%) and healthcare (10%).
As at 28 February, its two biggest ASX shareholdings were BHP Group Ltd (ASX: BHP) at 12.5% and CSL Ltd (ASX: CSL) at 7.2%.
The ETFâs stated goal is to offer investors mostly franked, passive income that beats the net income yield of the broader ASX.
The portfolio is rebalanced every three months, aiming to provide the highest gross yield outcome. Thatâs part of what investors get for the 0.73% management fee.
And while most ASX dividend shares only make one or two payouts per year, HSVT makes its distributions every month.
Thatâs a welcome feature for investors looking to secure a regular monthly passive income stream.
As are the bank-busting yields.
The ETFâs 12-month distribution yield works out to 6.9%. The fundâs gross distribution yield over the 12 months was 9.6%, at an average franking level of 91.6%.
Thatâs a long way ahead of the higher end term deposit rates of around 4.5% currently. Though, investing in any ASX share, even a diversified ETF, does come with significantly more risk than putting your money in a term deposit.
HSVTâs most recent monthly dividend of 7.1 cents per share was paid on 16 March, franked at 78%.
When the time comes to sell the ETF, investors may gain or lose money on the share price moves, just as with any ASX shares.
As you can see in the chart below, the HSVT share price is down 1% in 2023, roughly in line with the S&P/ASX 200 Index (ASX: XJO).
The post Looking for monthly passive income from ASX shares? This ETF offers bank-busting yields appeared first on The Motley Fool Australia.
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More reading
- 3 ASX shares that will pay you dividends every single month
- Hereâs how I would secure monthly dividends in the 2024 financial year with these ASX stocks
- Guess which ASX ETF pays dividends every month?
- Top ASX ETFs to buy in March 2023
Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL. The Motley Fool Australia has no position in any of the stocks mentioned. 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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