2 compelling ASX ETFs I'd buy for income and growth

I think both of these ASX ETFs have a lot to offer.

ASX-listed exchange-traded funds (ETFs) can be very effective options for investors looking to diversify and generate returns.

The two funds I'll talk about in a moment can provide investors with exposure to international assets, which plenty of Aussies may lack, as well as good returns.

I like S&P/ASX 200 Index (ASX: XJO) shares, but it would be a mistake not to include exposure to international shares. The global economy offers big opportunities for businesses that can capitalise. Below are two appealing ways to get that exposure.

Cubes placed on a Notebook with the letters "ETF" which stands for "Exchange traded funds".

Image source: Getty Images

Vanguard FTSE Europe Shares ETF (ASX: VEQ)

This ASX ETF essentially gives investors exposure to the entire European share market.

Numerous countries are represented in the portfolio, including the UK, France, Germany, Switzerland, the Netherlands, Sweden, Italy, Spain, Denmark, Belgium, Finland, Norway, Poland, Austria, Ireland, and Portugal.

The portfolio includes more than 1,200 businesses, making it extremely diversified. Although some are European-listed, many are global players.

The biggest businesses in the portfolio include SAP, ASML, Nestle, Roche, Novartis, Novo Nordisk, AstraZeneca, HSBC, Shell, and Siemens.

This portfolio has performed pleasingly for investors, returning an average of 15.7% per year over the last three years. While past performance is not a reliable indicator of future returns, it shows how these businesses can produce the goods for investors.

According to Vanguard, this ETF has a dividend yield of 3.1%, which I think is a solid level of passive income.

Betashares India Quality ETF (ASX: IIND)

With a population of over 1.4 billion, India is home to a significant proportion of the world's population, which is a big market for India's companies to tap into.

This fund gives Aussie investors exposure to the 30 highest-quality Indian companies based on a combined ranking for three different factors.

First, they should have high profitability. Second, they should have low leverage. Third, they should have high earnings stability.

Some of the businesses in the portfolio include Bharti Airtel, Infosys, Tata Consultancy, Hindustan Unilever, and Kotak Mahindra Bank.

I like the portfolio's sector allocation spread, with five sectors having a double-digit percentage weighting: financials, IT, industrials, consumer discretionary, and consumer staples.

The ASX ETF can benefit from ongoing trends such as digitalisation, a growing middle class, and investments in infrastructure. Over the past five years, the IIND ETF has returned an average of 12.5% per year, which I'd call a solid level of return.

In terms of the dividend income, at the end of June 2025, it had a dividend yield of 3.3%, which I think is satisfactory starting passive income for an international ASX ETF.

HSBC Holdings is an advertising partner of Motley Fool Money. Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended ASML. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended AstraZeneca Plc, HSBC Holdings, Novo Nordisk, and Roche Holding AG. The Motley Fool Australia has recommended ASML. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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