As well as giving investors exposure to global markets, exchange traded funds (ETFs) can be used by investors looking for income.
That's because some ETFs have been set up to give investors access to large groups of dividend shares through a single investment.
Two such ETFs are listed below. Here's why they could be top options for income investors:
BetaShares S&P 500 Yield Maximiser (ASX: UMAX)
The first ETF that could be a top option for income investors is the BetaShares S&P 500 Yield Maximiser.
This ETF has been designed to give investors access to the top 500 companies listed on Wall Street. But thanks to its 'covered call' strategy, the actively managed fund is expected to earn quarterly income that is significantly greater than the dividend yield of the underlying share portfolio over the medium term.
Among the companies included in the fund are giants such as Apple, Exxon Mobil, Johnson & Johnson, Microsoft, and Walmart.
At the last count, its units were providing investors with a trailing 6.6% distribution yield.
Vanguard Australian Shares Index ETF (ASX: VAS)
Another ETF for investors to consider for dividends is the Vanguard Australian Shares Index ETF.
Although this ETF isn't necessarily designed with dividends in mind, a large number of shares included in the fund pay dividends, which has led to it providing a bumper dividend yield again this year.
The Vanguard Australian Shares Index ETF gives investors the ability to invest in 300 of the largest companies on the Australian share market.
This means you'll be buying miners like BHP Group Ltd (ASX: BHP), banks such as Commonwealth Bank of Australia (ASX: CBA), and retailers as small as Adairs Ltd (ASX: ADH) and as large as Woolworths Group Ltd (ASX: WOW).
Last week the ETF paid out its latest quarterly dividend of 145.0577 cents per unit. This took its total dividends paid over the last 12 months to approximately $6.30 per unit, which equates to a yield of 7.6%.
