Here's how much income you'd get from $20,000 invested in these ASX ETFs

Here are two options for investors seeking a source of income from ETFs.

| More on:
Man holding a calculator with Australian dollar notes, symbolising dividends.

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

The good thing about ASX exchange-traded funds (ETFs) is that they offer investors ways to invest in all types of shares.

This includes dividend shares, which means that income investors can use them to build out an income portfolio effortlessly.

But which ASX ETFs would be good options for income investors? And how much would a $20,000 generate in dividends? Let's look at two popular options:

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

The BetaShares S&P 500 Yield Maximiser could be an ASX ETF to buy for income.

As its name suggests, this ETF maximises the yields from the top 500 companies listed on Wall Street. This includes giants such as AppleExxon MobilJohnson & Johnson, and Walmart.

And when I say maximise, I mean it. The S&P 500 index currently trades with a dividend yield of approximately 1.5%. However, this ETF's actively managed covered call strategy means it aims to pay out significantly more.

For example, at the last count, its units were providing investors with a 5.1% dividend yield. This means that a $20,000 investment would provide $1,020 of income.

Vanguard Australian Shares Index ETF (ASX: VHY)

Another ASX ETF for income investors to look at is the Vanguard Australian Shares High Yield ETF.

This popular funds gives investors low-cost exposure to a diverse group of ~70 ASX shares that have higher forecast dividends relative to the market average.

Among its holdings are big miners and banks, such as BHP Group Ltd (ASX: BHP) and Commonwealth Bank of Australia (ASX: CBA), as well as smaller names like Metcash Limited (ASX: MTS) and Eagers Automotive Ltd (ASX: APE).

At present, the ETF currently trades with a trailing dividend yield of 5.1%. This would also generate $1,020 of income from a $20,000 investment.

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 and Walmart. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended Johnson & Johnson. The Motley Fool Australia has positions in and/or has recommended BetaShares S&P 500 Yield Maximiser Fund, Metcash, and Eagers Automotive. 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

A piggy bank on the cloud in the blue sky symbolising a record high share price.
Record Highs

Here's why the Vanguard Australian Shares Index ETF (VAS) just hit an all-time ASX high

If you own this ETF, you've had a great day.

Read more »

ETF on different coloured wooden blocks.
ETFs

Top 10 most traded ASX ETFs in June

The most traded ASX ETF was the ever-popular Vanguard Australian Shares Index ETF.

Read more »

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

Own the Vanguard Australian Shares Index ETF (VAS)? Here's how much you'll get paid today

Today's VAS paycheque might disappoint some investors.

Read more »

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

Why I'd still call the FANG+ ETF a buy

The US tech giants have been great performers.

Read more »

The letters ETF with a man pointing at it.
ETFs

Buy and hold these ASX ETFs until 2030

Looking for long term options? Check out these picks.

Read more »

Contented looking man leans back in his chair at his desk and smiles.
ETFs

Should Aussies choose Vanguard Australian Shares Index ETF (VAS) or a term deposit for passive income?

Both investment options come with positives and negatives.

Read more »

Hand holding Australian dollar (AUD) bills, symbolising ex dividend day. Passive income.
ETFs

Where to invest $5,000 into ASX ETFs in July

Could these funds be a good place to invest your money?

Read more »

A woman sits at her desk thinking. She is surrounded by projections of world maps on various screens with data appearing below them.
ETFs

These top ASX global shares ETFs delivered stunning returns of 50% to 70% last year

We reveal the 6 best-performing ASX ETFs providing Aussie investors with international market exposure.

Read more »