If you're not keen on stock picking but want to build an income portfolio, then ASX exchange-traded funds (ETFs) could be the answer.
Instead of having to pick individual stocks to buy, ETFs allow investors to snap up large groups of income shares in one fell swoop.
This can provide near instant diversification for a portfolio, reducing risk and removing the stress of deciding which shares to buy.
But which ASX ETFs would be good for income? Two quality options to consider buying are listed below:
BetaShares S&P 500 Yield Maximiser (ASX: UMAX)
The BetaShares S&P 500 Yield Maximiser could be worth a closer look.
This income ETF has been designed to squeeze out as much income as possible from the top 500 companies listed on Wall Street. This includes giants such as Apple, Johnson & Johnson, Microsoft, and Walmart.
It does this through a covered call strategy, which aims to earn quarterly income that is significantly greater than the dividend yield of the underlying share portfolio over the medium term.
At the last count, its units were trading with a 12-month trailing 4.8% distribution yield.
Vanguard Australian Shares Index ETF (ASX: VHY)
Another ASX ETF for income investors to consider buying is the Vanguard Australian Shares High Yield ETF.
This popular fund offers investors low-cost exposure to a group of 72 ASX shares that have higher forecast dividends relative to the market average (based on broker research).
But don't worry, you won't just be buying miners and banks such as BHP Group Ltd (ASX: BHP) and Commonwealth Bank of Australia (ASX: CBA). The Vanguard Australian Shares Index ETF restricts the proportion invested in any one industry to 40% and 10% for any one company.
This ensures that investors have a nicely balanced group of holdings and aren't overexposed to any one side of the market. In addition, Australian Real Estate Investment Trusts are excluded from the index, which means there's no material exposure to the property market.
The ETF currently trades with a trailing dividend yield of 5.2%.
