The S&P/ASX 200 Index (ASX: XJO) has a reputation for offering investors one of the highest dividend yields in the world.
The ASX 200 has a long-run average dividend yield of 4% to 4.5%. With franking credits on top, the gross yield is even higher.
But times have changed. At least for now.
ASX 200 average dividend yield falls below 3.5%
Betashares says the trailing cash dividend yield of the S&P/ASX 200 Index (ASX: XJO) has fallen to 3.34% per year.
You can get a higher yield than that with a savings account at the bank.
While cash investments offer no potential capital growth like ASX shares do, income investors may not care about that.
Outside COVID, Betashares says this is the first time in 50 years that the ASX 200 dividend yield and the RBA cash rate are both below 4%.
Betashares senior investment strategist, Cameron Gleeson says:
This has massive implications for Australian investors, particularly those that rely on investment income.
Why has the average dividend yield fallen?
Generally speaking, ASX 200 mining shares and bank shares have delivered some of the strongest and most reliable dividend yields.
But that may not be the case anymore.
The volatile iron ore price over the past year means the big miners are likely to pay lower dividends.
In a new article, Gleeson comments:
For example, in February Rio Tinto Ltd (ASX: RIO) announced its smallest dividend in seven years, after earnings fell due to both higher production costs and lower commodities prices.
Meanwhile, the spectacular rise of the Commonwealth Bank of Australia (ASX: CBA) share price means the yield has fallen.
Gleeson commented:
Macquarie's dividends have fallen from their 2022/23 year high, while CBA's dividend growth has not kept up with its stock price, resulting in an underwhelming dividend yield of 2.73% p.a.
What are the forecast dividend yields for ASX 200 bank and mining shares?
According to the CommSec trading platform, the consensus forecast dividend yields for the big three miners in 2026 are as follows:
| ASX 200 mining share | Dividends per share | Dividend yield |
| Fortescue Ltd (ASX: FMG) | 77.8 cents | 4.20% |
| BHP Group Ltd (ASX: BHP) | 129 cents | 3.24% |
| Rio Tinto Ltd (ASX: RIO) | 322.1 cents | 2.87% |
Source: Dividend per share forecasts from Commsec, yields calculated based on closing share prices on 7 August 2025
The forecast dividend yields for the big banks in 2026 are as follows:
| ASX 200 bank share | Dividends per share | Dividend yield |
| ANZ Group Holdings Ltd (ASX: ANZ) | 168 cents | 5.43% |
| Westpac Banking Corp (ASX: WBC) | 155 cents | 4.56% |
| National Australia Bank Ltd (ASX: NAB) | 174 cents | 4.48% |
| Macquarie Group Ltd (ASX: MQG) | 680 cents | 3.17% |
| Commonwealth Bank of Australia (ASX: CBA | 540 cents | 3.03% |
Source: Dividend per share forecasts from Commsec, yields calculated based on closing share prices on 7 August 2025
As you can see, the forecast yields aren't quite what we are used to, although analysts expect some of the banks to pay still healthy sums.
Lower forecast dividends from the banks and miners are contributing to the fall in the average dividend yield of the broader ASX 200.
Gleeson comments:
Australia's reputation as a high dividend-market rests heavily on the shoulders of the big banks and miners.
Recently, this dependence has started to threaten the sustainability of the overall market dividend yield.
Over the last two years, dividends at an index level have been falling as the earnings yield has taken a hit.
Where should ASX investors look for dividends?
If you're concerned that the broader ASX 200 or the banks and miners are not going to deliver enough dividend income for you, you have options.
You might consider buying some other ASX 200 shares that offer better yields. Check out some broker recommendations here.
Alternatively, you might like to consider an ASX exchange-traded fund (ETF) that is focused on high dividend income.
One of the most popular options is the Vanguard Australian Shares High Yield ETF (ASX: VHY).
With $5.07 billion in funds under management, VHY is the 13th largest ASX ETF (427 ETFs are trading on the ASX and CBOE today).
The VHY ETF has a historical distribution yield of 8.57%, according to the latest ASX data for June 2025.
The VHY ETF delivered a total return of 14.88% in FY25. This means it outperformed the ASX 200, which produced a total return of 13.81%.
Meanwhile, the newest income-focused ETF on the market is the Betashares S&P Australian Shares High Yield ETF (ASX: HYLD).
The ASX HYLD will pay a monthly income from a portfolio of 50 high-yielding Australian companies.
Gleeson says the ETF aims to offer a higher dividend yield than the broader market and can be used as a core ASX shares allocation.
