In the current era of ASX 200 banks and mining shares not paying as much in dividends, investors might consider ETFs instead.
There are plenty of options, and some even pay distributions every month, making them ideal for retirees living on dividend income.
Here are three ASX ETFs with dividend themes that may be worth considering, depending on your individual investment goals.
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3 ASX ETFs designed to deliver strong income
Vanguard Australian Shares High Yield ETF (ASX: VHY)
VHY is the largest dividend-focused ASX ETF on the market, and seeks to track the FTSE Australia High Dividend Yield Index before fees. This entails investments in 75 companies, 70% of which are large-caps, with real estate investment trusts (REITs) excluded.
VHY ETF's top holdings are currently BHP Group Ltd (ASX: BHP) shares at 10% of monies invested, Commonwealth Bank of Australia (ASX: CBA) 9%, National Australia Bank Ltd (ASX: NAB) 7%, Westpac Banking Corp (ASX: WBC) 7%, and Telstra Group Ltd (ASX: TLS) 6%.
Since inception in May 2011, VHY ETF has delivered an average annual net total return of 9.58%.
The annual management fee is 0.25%.
Betashares Australian Dividend Harvester Active ETF (ASX: HVST)
Paying monthly dividends, HVST is designed for investors who need continual cash flow. It's an active ETF, so it doesn't follow an index. Instead, Betashares managers pick the stocks with the aim of exceeding the net annual income yield of the broader Australian market.
Betashares says it generally sticks to the market's top 100 companies by market capitalisation. HVST ETF's top holdings are currently CBA shares 15%, CSL Ltd (ASX: CSL) 6%, BHP 5%, Wesfarmers Ltd (ASX: WES) 3.5%, and Transurban Group (ASX: TCL) 3%.
Since inception in June 2022, HVST ETF has delivered an average annual net total return of 9.02%.
The annual management fee is 0.65% plus 0.07% in estimated expenses.
Australian Top 20 Equities Yield Maximiser Complex ETF (ASX: YMAX)
The YMAX ETF pays dividends quarterly, and also aims to deliver some capital growth. YMAX doesn't track an index. Instead, it invests in the top 20 ASX shares and sells covered call options on up to 100% of its shares to generate additional income from the option premiums.
YMAX's largest holdings are CBA shares 17%, BHP 12%, NAB 8%, Westpac 8%, and Wesfarmers 6%.
Since inception in November 2012, YMAX ETF has delivered an average annual net total return of 6.55%.
The management fee and expenses total 0.64% of the ETF's net asset value (NAV) per annum.
