With interest rates on the decline, now could be a good time to look at exchange traded funds (ETFs) for a source of income.
But which ASX ETFs could be worth a look? Let's check out three that could be top picks for income investors right now. They are as follows:
Betashares Australian Cash Plus Fund (ASX: MMKT)
The first ASX ETF to look at is the Betashares Australian Cash Plus Fund.
This ASX ETF provides income investors with exposure to a diversified mix of Australian bank deposits and other sophisticated money market securities that are typically only accessible to institutional investors.
This fund was recently named as a top pick for investors looking to enhance their returns on their cash allocation by Betashares.
It offers a trailing dividend yield of 4.3%, with dividends paid out monthly. This could make it an attractive option for investors who want consistent cash flow with minimal capital risk.
Betashares Australian Top 20 Equity Yield Maximiser Fund (ASX: YMAX)
Another ASX ETF for income investors to look at is the Betashares Australian Top 20 Equity Yield Maximiser Fund.
This fund targets strong quarterly income through a covered call strategy over a portfolio of the 20 largest blue-chip stocks on the Australian share market.
The strategy allows the fund manager to generate additional income by selling call options on its holdings. This approach can enhance yield, particularly in a stable or gradually rising market.
This certainly is the case at present with the fund trading with a very attractive trailing 12-month dividend yield of 7.7%. It was also recently named as one to buy by Betashares.
Vanguard Australian Shares High Yield ETF (ASX: VHY)
Finally, the Vanguard Australian Shares High Yield ETF could be a great option for income investors.
This ASX ETF holds approximately 70 ASX shares that are expected to offer above-average dividend yields, based on broker research. 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. Australian Real Estate Investment Trusts (A-REITS) are excluded from the index."
Among its diverse holdings are some of Australia's biggest and most consistent dividend payers. This includes mining giant BHP Group Ltd (ASX: BHP), Australia's largest bank Commonwealth Bank of Australia (ASX: CBA), telco leader Telstra Group Ltd (ASX: TLS), and toll road operator Transurban Group (ASX: TCL).
At present, the fund offers a dividend yield of approximately 5%.
