For investors who want steady income without the stress of picking individual shares, exchange-traded funds (ETFs) are an excellent way to build a diversified, hands-free portfolio.
But which ones could be buys?
Here are three ASX ETFs that could help investors generate reliable passive income, not just for today, but for decades to come.
Vanguard Australian Shares High Yield ETF (ASX: VHY)
If your goal is dependable dividends, the Vanguard Australian Shares High Yield ETF is one of the strongest options on the ASX.
This ASX ETF invests in a basket of Australian shares with above-average dividend yields, many of which have a long history of rewarding shareholders through fully franked distributions. Its portfolio includes household names such as BHP Group Ltd (ASX: BHP), Westpac Banking Corp (ASX: WBC), and Telstra Group Ltd (ASX: TLS).
The Vanguard Australian Shares High Yield ETF's appeal lies in its simplicity. It is designed for income seekers who want consistent cash flow and broad diversification across sectors like banking, mining, and telecommunications. And while its dividends can fluctuate year to year, the fund's diversified nature helps smooth out returns over time. It currently boasts a 4.4% dividend yield.
Vanguard Australian Shares Index ETF (ASX: VAS)
Another option for passive income is the Vanguard Australian Shares Index ETF,
It tracks the ASX 300 Index, which includes the largest and most established Australian shares.
That means you get exposure to giants such as Commonwealth Bank of Australia (ASX: CBA), Wesfarmers Ltd (ASX: WES), and ResMed Inc. (ASX: RMD), all of which have proven track records of growing earnings and dividends over the long term.
While its dividend yield is lower than what is on offer with the Vanguard Australian Shares High Yield ETF, it offers greater diversification and steadier long-term growth. It is the kind of fund you could buy, hold, and rely on for the rest of your life.
It currently trades with a 3.1% dividend yield.
Betashares Global Royalties ETF (ASX: ROYL)
Finally, for something a little different, there is the Betashares Global Royalties ETF. It gives investors access to shares benefiting from intellectual property and royalties-based income streams.
This ASX ETF invests in businesses that earn recurring revenue from assets such as music rights, patents, mining royalties, and brand licensing. Its portfolio includes names like Warner Music Group (NASDAQ: WMG), Royal Gold (NASDAQ: RGLD), and Arm Holdings (NASDAQ: ARM).
These companies don't just sell products once, they collect ongoing income every time their intellectual property is used, streamed, or extracted. That means predictable cash flow and strong margins, even in slower economic conditions.
It currently trades with a 4.4% dividend yield and was recently recommended by analysts at Betashares.
