Looking for an income boost? If you've answered yes, then the exchange-traded funds (ETFs) in this article could be worth considering.
They provide income investors with the opportunity to generate income from a large group of dividend-paying shares. Here's what you need to know about them:
Betashares Australian Top 20 Equity Yield Maximiser Fund (ASX: YMAX)
The Betashares Australian Top 20 Equity Yield Maximiser Fund could be a great option for income investors.
This fund aims to produce attractive quarterly income and reduce the volatility of portfolio returns through a clever covered call strategy over a portfolio of the 20 largest blue chip shares listed on the local share market.
Betashares has recommended the ASX ETF as one to buy to counter falling dividend yields. It notes that it "performs well in a neutral or gradually rising market." At present, it trades with a trailing 12-month dividend yield of 7.6%.
Betashares FTSE RAFI Australia 200 ETF (ASX: QOZ)
A second ASX ETF for income investors to look at is the FTSE RAFI Australia 200 ETF.
It is another fund that is being recommended by analysts at BetaShares. The FTSE RAFI Australia 200 ETF uses a fundamental indexing strategy which is designed to screen for stocks based on their merits rather than market capitalisation.
BetaShares notes that instead of size, the ETF screens ASX shares using metrics such as sales, cash flow, dividends, and book value. It then ranks these shares and invests in the companies accordingly.
As a result, this means that investors end up holding stocks that have healthier balance sheets, which have a greater capacity to pay dividends.
At present, the Betashares FTSE RAFI Australia 200 ETF trades with a trailing dividend yield of 4.7%.
Vanguard Australian Shares High Yield ETF (ASX: VHY)
A third and final ASX ETF for income investors is the Vanguard Australian Shares High Yield ETF.
This is a more traditional fund. It loads up a portfolio of many of the biggest forecast dividend yields available to investors on the Australian share market, based on broker estimates.
Importantly, the fund doesn't just buy banks and miners. It has diversity in mind and its holdings come from all corners of the market. This includes miner and banks such as BHP Group Ltd (ASX: BHP) and Commonwealth Bank of Australia (ASX: CBA), but also companies like Transurban Group (ASX: TCL) and Lottery Corporation Ltd (ASX: TLC).
The Vanguard Australian Shares High Yield ETF currently trades with a dividend yield of 4.85%.
