If you're wanting to build an income portfolio but aren't sure which ASX shares to buy, you could look at the exchange traded funds (ETFs) listed below instead.
These ETFs have been set up with the aim of providing investors with an above-average dividend yield each year. Here's what income investors need to know about them:
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BetaShares S&P 500 Yield Maximiser (ASX: UMAX)
The first ETF that could be a buy for income investors is the BetaShares S&P 500 Yield Maximiser.
This clever ETF has been designed to generate attractive quarterly income and reduce the volatility of portfolio returns. In order to deliver on this objective, BetaShares has implemented an equity income investment strategy over a portfolio of shares comprising Wall Street's famous S&P 500 Index.
This means that the ETF is able to squeeze out more income than you would receive by investing in the companies included in the fund individually. These companies include the likes of Apple, Exxon Mobil, Johnson & Johnson, Microsoft, and United Health.
At the last count, the BetaShares S&P 500 Yield Maximiser was providing investors with a trailing 6.9% distribution yield.
Vanguard Australian Shares High Yield ETF (ASX: VHY)
Another ASX ETF for income investors to consider buying is the Vanguard Australian Shares High Yield ETF.
This is a much simpler ETF and has been designed to provide investors with easy access to a diverse group of ASX shares that brokers are forecasting to provide larger than average dividend yields.
In order to prevent you having a portfolio filled with just miners or banks, Vanguard restricts the proportion invested in any one industry to 40% and 10% for any one company. This means you'll always be holding a diverse collection of dividend shares with the Vanguard Australian Shares High Yield ETF.
Among the companies included in the fund are giants BHP Group Ltd (ASX: BHP) and Commonwealth Bank of Australia (ASX: CBA), as well as the rest of the big four banks.
The Vanguard Australian Shares High Yield ETF currently trades with an estimated forward dividend yield of 5.3%.
