If you want to build an income portfolio but aren't keen on stock picking, then ASX exchange-traded funds (ETFs) could be a great alternative.
That's because they give you access to large groups of dividend shares in one fell swoop. In many respects, this provides instant diversification for a portfolio.
But which ASX ETFs would be good options for income? Two to consider are listed below:
Image source: Getty Images
BetaShares S&P 500 Yield Maximiser (ASX: UMAX)
The first option for investors to consider buying for an income boost is the BetaShares S&P 500 Yield Maximiser.
This actively managed fund provides investors with access to the top 500 companies listed on Wall Street. This includes giants such as Apple, Exxon Mobil, Microsoft, and Walmart.
However, it operates in a very different way from a standard ETF. That's because the fund uses a clever covered call strategy to target quarterly income that is significantly greater than the dividend yield of the underlying share portfolio over the medium term.
This means that at present its units offer investors a trailing 5.9% distribution yield.
Vanguard Australian Shares Index ETF (ASX: VHY)
Another ASX ETF for income investors is the Vanguard Australian Shares High Yield ETF.
This is a more traditional ETF, offering investors low-cost exposure to a group of 70+ ASX shares that are forecast to have bigger dividend yields relative to the market average.
But the fund doesn't just load up on miners and banks. It restricts the proportion invested in any one industry to 40% and 10% for any one company. This means that as well as getting a slice of BHP Group Ltd (ASX: BHP) and Commonwealth Bank of Australia (ASX: CBA), you get smaller companies like Super Retail Group Ltd (ASX: SUL).
The Vanguard Australian Shares Index ETF currently trades with a trailing dividend yield of 5.6%.
