One of the most popular exchange traded funds (ETFs) on the Australian share market is the Vanguard Australian Shares Index ETF (ASX: VAS).
This ETF aims to track the return of the S&P/ASX 300 Index before taking into account fees, expenses, and tax.
This means that when you buy this ETF, you will be buying a slice of a diverse group of ASX shares including giants like BHP Group Ltd (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA), and Woolworths Group Ltd (ASX: WOW), as well as smaller names such as Dicker Data Ltd (ASX: DDR) and Myer Holdings Ltd (ASX: MYR).
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Earning income from the Vanguard Australian Shares Index ETF
The Australian share market is one of the more generous markets, with a high proportion of companies sharing their profits with investors.
The good news is that there are plenty of dividend payers in the Vanguard Australian Shares Index ETF, which explains why it is a popular option for income investors.
In fact, according to Vanguard, at present the ETF provides investors with a 4.4% dividend yield.
This means it would be possible for investors to generate a monthly income of $300 per month from its units.
The only issue, though, is that it pays its dividends in quarterly instalments. So, investors would have to be disciplined and distribute their dividends evenly each month.
With that in mind, if you wanted to generate $300 of passive income from the Vanguard Australian Shares Index ETF, you would need to receive total dividends of $3,600 a year.
Based on its current yield, investors would need to own approximately $82,000 worth of units. This equates to 937 units at current prices.
