If you don't like stock picking but want to generate income from the share market, then exchange-traded funds (ETFs) could be the answer.
But which ASX ETFs could be good picks for income investors? Let's take a look at three that could be worth considering:
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Betashares Australian Top 20 Equity Yield Maximiser Fund (ASX: YMAX)
The Betashares Australian Top 20 Equity Yield Maximiser Fund could be an ASX ETF for income investors to consider buying.
Betashares notes that this fund aims to generate attractive quarterly income and reduce the volatility of portfolio returns through something called a covered call strategy. This strategy is held over a portfolio of the 20 largest blue-chip shares listed on the Australian share market.
The fund manager has recommended the ETF as a top option to counter falling dividend yields. It notes that the aforementioned covered call strategy "performs well in a neutral or gradually rising market, allowing call options to generate income without stocks being called away too often, as has been seen in recent months."
At present, it trades with a trailing 12-month dividend yield of 6.9%.
Betashares Australian Cash Plus Fund (ASX: MMKT)
Another ASX ETF that could be a good option for income investors is the Betashares Australian Cash Plus Fund.
Betashares believes that it would be a good pick for investors seeking an enhanced yield from their core cash allocation.
It notes that "MMKT provides monthly income to investors by offering diversified exposure to not only Australian bank deposits, but also a range of more sophisticated money market securities usually only available to institutional investors."
At present, the fund trades with a trailing dividend yield of 4.9%. And as mentioned above, it pays out its dividends every month. This provides regular income with a high degree of capital stability.
Vanguard Australian Shares High Yield ETF (ASX: VHY)
Finally, the Vanguard Australian Shares High Yield ETF is a popular option for income investors.
This fund uses broker research to group together in the region of 70 ASX shares that are forecast to have larger than average dividend yields.
But rather than just loading up on banks or miners, the fund has diversity in mind. This means that its holdings come from all corners of the market.
Among them are the likes of BHP Group Ltd (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA), Telstra Group Ltd (ASX: TLS), and Transurban Group (ASX: TCL).
The Vanguard Australian Shares High Yield ETF currently trades with a dividend yield of 4.8%.
