For investors looking to generate reliable passive income, exchange-traded funds (ETFs) remain one of the simplest and most effective tools on the ASX.
Whether you're supplementing your salary, preparing for retirement, or building long-term wealth, income-focused ETFs can deliver consistent dividends while offering the benefits of diversification.
If you're looking to bolster your portfolio this month, here are three top ASX ETFs that could be worth considering.
Vanguard Australian Shares High Yield ETF (ASX: VHY)
The first ASX ETF for passive income is the Vanguard Australian Shares High Yield ETF. It targets a portfolio of high-dividend-paying Australian shares.
With exposure to dividend stalwarts such as Commonwealth Bank of Australia (ASX: CBA), Rio Tinto Ltd (ASX: RIO), and Transurban Group (ASX: TCL), this fund delivers a relatively high yield, and many of these distributions are fully franked — a welcome bonus for Australian taxpayers.
Overall, the Vanguard Australian Shares High Yield ETF could be a strong choice for those seeking predictable cash flow from their portfolio. It currently offers a 4.8% dividend yield.
Vanguard Australian Shares Index ETF (ASX: VAS)
While Vanguard Australian Shares Index ETF is not strictly a passive income ETF, its broad exposure to the ASX 300 index means investors benefit from a healthy stream of dividends by default.
With holdings like Telstra Group Ltd (ASX: TLS), Super Retail Group Ltd (ASX: SUL), Wesfarmers Ltd (ASX: WES), the major banks, and miners like BHP Group Ltd (ASX: BHP), this fund delivers diversification across industries and market caps. It pays dividends quarterly and has historically yielded around 4% (before franking credits).
For those wanting a set-and-forget core holding that blends income with capital growth potential, the Vanguard Australian Shares Index ETF could be worth considering.
Betashares Global Royalties ETF (ASX: ROYL)
For something a little different, the Betashares Global Royalties ETF could be worth a look. It offers investors easy access to a group of royalty companies. These businesses generate income by owning the rights to revenue streams from intellectual property, music, natural resources, pharmaceuticals, and more. This includes Deterra Royalties Ltd (ASX: DRR) on the local bourse.
Because royalty companies often earn recurring revenue with minimal overheads, they tend to have attractive margins and the ability to return capital to investors. The fund is diversified across multiple royalty sectors and geographies, making it a unique way to tap into global income trends.
At present, it offers a 3.5% dividend yield. It was recently named as one to consider buying by analysts at Betashares.
