Buy these ASX ETFs for their big dividends this month

Not sure which dividend shares to buy? These ETFs could be the answer.

| More on:
Woman holding $50 notes and smiling.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

If you're building an income portfolio but don't have sufficient funds to maintain a truly diverse portfolio, then exchange traded funds (ETFs) could be the answer.

That's because there are a number of ETFs that have been set up to give investors exposure to a collection of dividend shares.

Two that could be worth considering are listed below:

Vanguard Australian Shares High Yield ETF (ASX: VHY)

The first ASX ETF for income investors to consider is the Vanguard Australian Shares High Yield ETF.

This rules-based ETF provides investors with low-cost exposure to a diverse group of 70+ ASX shares that have higher forecast dividends relative to the market average.

In respect to rules, Vanguard restricts the proportion invested in any one industry to 40% and 10% for any one company. Furthermore, Australian Real Estate Investment Trusts (A-REITS) are excluded from the index.

This ultimately means you'll be buying companies as large as BHP Group Ltd (ASX: BHP) and Commonwealth Bank of Australia (ASX: CBA), and as small as Dicker Data Ltd (ASX: DDR) and Elders Ltd (ASX: ELD).

The ETF currently trades with an estimated forward dividend yield of 5.5%.

BetaShares S&P 500 Yield Maximiser (ASX: UMAX)

Another ASX ETF that could be a great 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.

However, 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.

As of 31 March, its units were providing investors with a trailing 7.4% distribution yield.

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 positions in and has recommended Dicker Data. The Motley Fool Australia has positions in and has recommended BetaShares S&p 500 Yield Maximiser Fund and Dicker Data. The Motley Fool Australia has recommended Elders and 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.

More on Dividend Investing

A woman sits at her computer with her chin resting on her hand as she contemplates her next potential investment.
Dividend Investing

2 market-leading ASX dividend stocks to buy in April

Analysts have put buy ratings on these market-leaders.

Read more »

Father in the ocean with his daughters, symbolising passive income.
Dividend Investing

I'd spend $8k on these ASX 200 shares today to target a $6,102 annual passive income

I believe these ASX 200 shares will continue rewarding passive income investors for years to come.

Read more »

Man holding Australian dollar notes, symbolising dividends.
ETFs

Want the latest dividend from the Vanguard Australia Shares ETF (VAS)? Here's what you have to do

If you want to bag the latest VAS dividend, here's what you need to do.

Read more »

A smiling businessman in the city looks at his phone and punches the air in celebration of good news.
Dividend Investing

Investing for passive income? Keep any eye out for that boosted Telstra dividend today!

If you own Telstra shares, keep an eye out for that juicy dividend payout today.

Read more »

A happy construction worker or miner holds a fistfull of Australian money, indicating a dividends windfall
Dividend Investing

Invest $12,000 in Woodside stock and get $5,700 in passive income

Reliable dividend shares are everywhere on the ASX. Here's how you could use that to your advantage.

Read more »

Australian dollar notes in businessman pocket suit, symbolising ex dividend day.
Dividend Investing

3 ASX 300 dividend shares to buy in April

These shares have been named as buys by brokers and tipped to offer very attractive yields.

Read more »

A couple of friends at a rooftop party enjoying some hot and tasty Domino's pizza
Dividend Investing

Own Domino's shares? Today is pay day!

Eligible Domino’s shareholders can expect some welcome passive income today.

Read more »

a man with a wide, eager smile on his face holds up three fingers.
Opinions

3 top income-focused ASX shares to buy before April

I'd bolster my income by buying these dividend-payers before the next month rolls around.

Read more »