Which ASX dividend ETF offers the highest income yield right now?

Which ASX dividend ETF comes out on top?

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When it comes to the ASX boards, there are dozens and dozens of exchange-traded funds (ETFs) to choose from. Back in the day, ETFs used to come in a 'you can have any ETF you want, as long as it's an index fund' mould. But today, if you can think of a sector, country, trend or commodity, chances are there's an ETF for it. But what about ASX dividend ETFs?

Yes, there are indeed a number of ETFs on the ASX that specifically focus on providing dividend income. So let's dig into a few of them, and see which one is offering the biggest yield right now.

Vanguard and iShares offer up ASX dividend income ETFs

First up is the Vanguard Australian Shares High Yield ETF (ASX: VHY), the ASX's largest dividend-focused ETF. VHY currently invests in 62 ASX dividend shares, the most heavily weighted of which are Commonwealth Bank of Australia (ASX: CBA), Wesfarmers Ltd (ASX: WES), BHP Group Ltd (ASX: BHP), National Australia Bank Ltd. (ASX: NAB) and Westpac Banking Corp (ASX: WBC).

VHY charges a management fee of 0.25% per annum and has returned an average of 7.88% per annum over the past five years. Its trailing dividend distribution yield is currently sitting at 5.02%.

Next, we have the iShares S&P/ASX Dividend Opportunities ETF (ASX: IHD). This is another popular dividend ETF from BlackRock. This ETF has 48 holdings, the most heavily weighted of which are Woolworths Group Ltd (ASX: WOW), Wesfarmers, BHP, Coles Group Ltd (ASX: COL) and Fortescue Metals Group Limited (ASX: FMG).

IHD charges a management fee of 0.3% per annum and has returned an average of 5.97% per annum over the past five years. Its trailing dividend distribution yield is presently at 5.36%.

What about SPDR and VanEck?

Up next is the SPDR MSCI Australia Select High Dividend Yield Fund (ASX: SYI). This is a more concentrated fund than the two above, holding 32 ASX shares at the latest update. The largest of these are Fortescue Metals, BHP, Rio Tinto Limited (ASX: RIO), Wesfarmers and Mineral Resources Limited (ASX: MIN).

SYI charges a management fee of 0.35% per annum and has returned an average of 6.6% per annum over the past five years. Its trailing dividend distribution yield is currently sitting at 7.78%.

Finally, we have the VanEck Morningstar Australian Moat Income ETF (ASX: DVDY). DVDY is our most concentrated income fund we're checking out today, with just 25 holdings at the latest data. Its top holdings are Wesfarmers, Woolworths, ASX Ltd (ASX: ASX), Transurban Group (ASX: TCL) and APA Group (ASX: APA).

DVDY charges a management fee of 0.35% per annum. This particular fund hasn't been around as long as the ones above. Its inception date is September 2020. Since then, it has returned an annual average of 17.32% (remember, that isn't a fair comparison to the funds above). Its trailing dividend distribution yield is currently sitting at 3.42%.

Foolish Takeaway

So as you can see, Vanguard's VHY ETF has returned the most over the past five years to its investors, accounting for both capital growth and dividend income. It also offers the lowest fees on this list. However, the SPDR SYI ETF currently offers the largest income potential, going off of trailing yield.

So one of these funds might suit differing preferences to another, depending on individual investing goals. One thing is for sure though. If you're after an ASX dividend income ETF, you are certainly spoilt for choice!

Motley Fool contributor Sebastian Bowen owns National Australia Bank Limited and Vanguard Australian Shares High Yield Etf. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended APA Group, COLESGROUP DEF SET, and Wesfarmers Limited. The Motley Fool Australia has recommended Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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