If you're wanting to build an income portfolio in November but don't have sufficient funds to maintain a diverse portfolio, don't worry.
That's because there are exchange-traded funds (ETFs) out there that could potentially help you achieve this goal.
For example, the ASX ETFs named below offer investors exposure to a large collection of dividend-paying stocks in one fell swoop. This can provide a decent level of diversification for a portfolio.
Here's what you need to know about these income ETFs:
Betashares FTSE RAFI Australia 200 ETF (ASX: QOZ)
The FTSE RAFI Australia 200 ETF could be an income ETF to consider buying. It was recently recommended as an option by BetaShares to counter falling dividend yields.
This fund uses a fundamental indexing strategy designed to screen stocks based on their merits rather than market capitalisation. It screens ASX shares using sales, cash flow, dividends, and book value. After which, it ranks these stocks and invests in them accordingly.
The fund manager notes that this strategy means that investors ultimately end up holding stocks that have healthier balance sheets and a greater capacity to pay dividends. At present, the Betashares FTSE RAFI Australia 200 ETF currently trades with a trailing dividend yield of 4.5%.
Vanguard Australian Shares Index ETF (ASX: VHY)
Another ASX ETF that could be a top option for income investors this month is the Vanguard Australian Shares High Yield ETF.
This popular fund provides investors with low-cost exposure to a portfolio of ~70 ASX stocks that brokers are forecasting to have higher dividend yields relative to the market average.
Positively, Vanguard notes that security diversification is achieved by restricting the proportion invested in any one industry to 40% of the total ETF and 10% for any one company. In addition, Australian Real Estate Investment Trusts (A-REITS) are excluded from it, so there's no real direct exposure to the property market.
As a result, you will be left owning a portfolio of generous dividend-paying stocks such as BHP Group (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA), and and Transurban Group (ASX: TCL).
The ETF currently trades with a trailing dividend yield of 4.9%.
BetaShares S&P 500 Yield Maximiser (ASX: UMAX)
A final ASX ETF for income investors to consider buying in November 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.
However, through a covered call strategy it is able to target quarterly income that is significantly greater than the dividend yield you would expect to receive from the underlying share portfolio.
This means, for example, at present it trades with a trailing 4.6% distribution yield.
