The Betashares Australian Shares High Yield ETF (ASX: HYLD) has made its debut on the Australian share market on Wednesday.
At the time of writing, the income-focused fund is up 0.3% to $30.20.
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Betashares Australian Shares High Yield ETF launches
The launch of the Betashares Australian Shares High Yield ETF comes at an opportune time for Aussie income investors.
The Reserve Bank of Australia (RBA) has been cutting interest rates this year and is widely expected to continue taking them lower over the next 18 months as inflation falls. This makes dividend-focused investments increasingly appealing to income seekers, as cash returns on term deposits and savings accounts decline.
The HYLD ETF aims to provide investors with exposure to 50 ASX shares with high forecast dividend yields, while screening out potential dividend traps. The latter are companies that may have unsustainably high yields or excessive volatility.
This ASX ETF currently trades with a 12-month trailing dividend yield of 4.5%, paid to investors monthly, and carries an annual management fee of 0.25%.
After fees that would mean a $10,000 investment generates approximately $425 in passive income.
What is inside the HYLD ETF?
The ASX ETF's portfolio is concentrated in Australia's income-rich sectors, with financials making up 42.7% of the fund and materials 20%. Its top 10 holdings feature some of the ASX's biggest names and most established dividend payers. But interestingly not Commonwealth Bank of Australia (ASX: CBA), given that its dividend yield is reasonably low now after its huge rally over the past 18 months.
Here are the top 10 ASX shares in the fund and their respective portfolio weighting:
- National Australia Bank Ltd (ASX: NAB) – 10.3%
- Westpac Banking Corp (ASX: WBC) – 10.1%
- ANZ Group Holdings Ltd (ASX: ANZ) – 10.0%
- BHP Group Ltd (ASX: BHP) – 9.4%
- Wesfarmers Ltd (ASX: WES) – 5.4%
- Macquarie Group Ltd (ASX: MQG) – 5.0%
- Telstra Group Ltd (ASX: TLS) – 4.8%
- Transurban Group (ASX: TCL) – 4.4%
- Woodside Energy Group Ltd (ASX: WDS) – 4.3%
- Rio Tinto Ltd (ASX: RIO) – 3.9%
Beyond these giants, the Betashares Australian Shares High Yield ETF holds smaller positions in ASX shares like agribusiness Elders Ltd (ASX: ELD), grain exporter Graincorp Ltd (ASX: GNC), intellectual property services company IPH Ltd (ASX: IPH), and retail conglomerate Super Retail Group Ltd (ASX: SUL), providing diversification across consumer, industrial, and agricultural sectors.
Foolish takeaway
With its diversified approach and focus on sustainable high dividends, the HYLD ETF could act as a core Australian shares exposure for income-focused investors. It offers the potential to deliver higher income than the broad market, while giving investors access to many of the ASX 200's most reliable dividend payers.
