2 ASX ETFs to buy for an income boost

These ETFs could be quality options for income investors.

| More on:
ETF written on cubes sitting on piles of coins.

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 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:

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 AppleExxon MobilMicrosoft, 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%.

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 Apple, Microsoft, and Walmart. The Motley Fool Australia has positions in and has recommended BetaShares S&P 500 Yield Maximiser Fund. The Motley Fool Australia has recommended Apple 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 ETFs

Cubes placed on a Notebook with the letters "ETF" which stands for "Exchange traded funds".
ETFs

Are these market-beating ASX ETFs top buys in December?

These ETFs have delivered sensational returns for investors.

Read more »

a woman raises her arm in celebration while looking at her mobile phone on her sofa at home feeling excited about the WiseTech share price rise
ETFs

Own the Vanguard Australian Shares ETF (VAS)? Here's how it went in November

Own Vanguard's most popular ETF? You did well this month...

Read more »

ETF written on cubes sitting on piles of coins.
ETFs

The rise of dividend ETFs in Australia: A new era of investment

Dividend ETFs can be great, but make sure you watch out for these key indicators.

Read more »

The letters ETF sit in orange on top of a chart with a magnifying glass held over the top of it
ETFs

4 top ASX ETFs to buy in December

These ETFs could give your portfolio a boost next month.

Read more »

Five happy friends on their phones.
ETFs

Buy these exciting ASX tech ETFs in December

These ETF give investors access to some high-quality tech stocks from across the globe.

Read more »

Woman with headphones on relaxing and looking at her phone happily.
Dividend Investing

How I'd aim to build a bulletproof monthly ASX passive income portfolio with just $10,000

If I were building a bulletproof passive income stream today, I wouldn’t invest in just a few high-yielding ASX stocks.

Read more »

Bonds spelt out on block cubes stacked on top of each other in front of a laptop.
ETFs

Are fixed income ASX ETFs a good buy right now?

Why this could be a good time to look at bonds.

Read more »

Three miners looking at a tablet.
ETFs

2 ASX mining ETFs to buy in December

Lithium and uranium exposure is a doddle with these ETFs.

Read more »