For retirees, the right investments can make all the difference between just getting by and enjoying a comfortable lifestyle. Steady, reliable income is often the top priority, but so is preserving capital and keeping a balanced portfolio.
ASX exchange-traded funds (ETFs) can be a great way to achieve these goals, offering diversified exposure and regular distributions without the need to manage a long list of individual shares.
Here are three income-focused ASX ETFs that could be particularly appealing for retirees.
Vanguard Australian Shares High Yield ETF (ASX: VHY)
The Vanguard Australian Shares High Yield ETF aims to provide exposure to a portfolio of ASX-listed companies with higher-than-average forecast dividend yields. The fund's holdings include many of Australia's most established dividend payers, such as the major banks and large miners, giving investors a core source of income with the potential for franking credits.
The ETF currently offers a trailing dividend yield of around 4.7% and pays quarterly distributions. While equity markets can be volatile, Vanguard Australian Shares High Yield ETF's focus on established, cash-generative companies can help provide both income and long-term capital growth potential — something that's important for retirees managing longevity risk.
Betashares Australian Cash Plus Fund (ASX: MMKT)
While the Vanguard Australian Shares High Yield ETF sits firmly in the equity camp, the Betashares Australian Cash Plus Fund offers income from the defensive end of the spectrum. This fund invests in high-quality money market instruments, including bank deposits, government securities, and short-term debt from institutional-grade issuers.
The Betashares Australian Cash Plus Fund is designed for investors seeking a yield premium over standard bank deposits, without taking on equity market risk. It currently has a trailing yield of 4.2%, with income paid monthly. For retirees, it could be a useful tool for holding cash while still earning a competitive return — and for reducing portfolio volatility during market downturns. Betashares recently named it as one to consider buying.
Betashares Global Royalties ETF (ASX: ROYL)
Royalties may not be the first thing that comes to mind for income investing, but that's what makes the Betashares Global Royalties ETF unique. This ASX ETF invests in global companies that earn a significant portion of their revenue from royalties, intellectual property rights, and royalty-related income.
This includes businesses in mining, energy, music, pharmaceuticals, and technology. Because royalty owners collect revenue without running day-to-day operations, they often enjoy high margins and steady cash flows. The Betashares Global Royalties ETF currently offers a 3.5% yield, with monthly distributions, and adds a layer of diversification that is not tied directly to traditional equity sectors. It was also named as one to consider buying by the team at Betashares.
