3 ASX ETFs for passive income in 2026

These funds could be great picks for passive income.

Generating passive income does not have to mean managing a long list of individual shares.

For many investors, exchange traded funds (ETFs) can provide a simpler way to access diversified income streams, with regular distributions and less reliance on the fortunes of any single company.

As we head through 2026, there are several ASX ETFs that stand out for income-focused investors. Here are three that could be worth considering for passive income this year.

Happy young couple saving money in piggy bank.

Image source: Getty Images

Vanguard Australian Shares High Yield ETF (ASX: VHY)

The first ASX ETF to consider for passive income is the Vanguard Australian Shares High Yield ETF.

This ETF focuses on Australian shares with above-average dividend yields. Its portfolio is tilted toward banks, miners, and other mature businesses that generate strong cash flows and regularly return capital to shareholders.

Holdings include companies such as Commonwealth Bank of Australia (ASX: CBA), BHP Group Ltd (ASX: BHP), and Telstra Group Ltd (ASX: TLS). These businesses are not immune to cycles, but they have long histories of paying dividends.

This ultimately means that the Vanguard Australian Shares High Yield ETF offers a straightforward way to access the Australian market's dividend culture, with the added benefit of franking credits boosting after-tax returns for many investors.

Betashares S&P Australian Shares High Yield ETF (ASX: HYLD)

Another ASX ETF that could suit passive income investors is the Betashares S&P Australian Shares High Yield ETF.

This fund also targets high-yield Australian shares, but it takes a slightly different approach. It seeks to improve on traditional high-dividend strategies by aiming to screen out potential dividend traps.

This includes excluding shares that are projected to pay unsustainably high dividend yields, as well as companies that exhibit high levels of volatility relative to their forecast dividend payout.

The ASX ETF includes holdings such as Woodside Energy Group Ltd (ASX: WDS), Fortescue Ltd (ASX: FMG), and Suncorp Group Ltd (ASX: SUN).

It currently trades with an annualised dividend yield of 4.4% and was recently recommended by analysts at Betashares.

Betashares Global Royalties ETF (ASX: ROYL)

A final ASX ETF to consider for passive income in 2026 is the Betashares Global Royalties ETF.

This fund provides exposure to global shares that earn royalties from intellectual property, natural resources, and infrastructure-like assets. This includes businesses involved in music royalties, energy royalties, and specialised licensing arrangements.

Holdings include companies such as Franco-Nevada (NYSE: FNV) and Universal Music Group. These businesses often generate relatively stable cash flows because royalties are earned regardless of who operates the underlying asset.

At present, it trades with a 5.6% trailing dividend yield. It was also recently recommended to income investors by Betashares.

Motley Fool contributor James Mickleboro has positions in Woodside Energy Group. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool Australia has recommended BHP Group and Vanguard Australian Shares High Yield ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Exchange-Traded Funds (ETFs)

Man with his hands out as if pondering his options.
Exchange-Traded Funds (ETFs)

Do you own this ASX dividend ETF? Fundie explains why 'we aren't fans'

This ASX ETF aims to maximise income using covered call options.

Read more »

A businessman's hands surround a circular graphic with a United States flag and dollar signs.
Dividend Investing

IVV ETF and other iShares funds are paying dividends today. Here's how much

Aussie investors love the IVV ETF, which tracks the US benchmark S&P 500 Index.

Read more »

Man smiling ahead while working on his MacBook.
Exchange-Traded Funds (ETFs)

3 strong ASX ETFs for investors who want quality

These funds provide investors with access to quality stocks from across the globe.

Read more »

A happy young couple lie on a wooden deck using a skateboard for a pillow.
Exchange-Traded Funds (ETFs)

Where to invest $15,000 in ASX ETFs in October

Wondering where to put your money? These funds could be worth a look.

Read more »

a man in a hoodie grins slyly as he sits with his hands poised on a keyboard. He is superimposed with a graphic image of a computer screen asking for a password, suggesting he is a hacker.
Exchange-Traded Funds (ETFs)

25% per annum: Is the BetaShares Cybersecurity ETF (HACK) a buy today?

Will this ETF keep banging out stunning returns?

Read more »

Two colleagues looking at a graph and comparing share prices.
Exchange-Traded Funds (ETFs)

VGS vs V500: Which Vanguard ETF would I buy?

I look at whether broader diversification or greater US exposure wins me over.

Read more »

Piles of coins.
Dividend Investing

Own VanEck ASX ETFs? Here's your next dividend

Show us the money!

Read more »

Woman and AI robot working together in the office.
Exchange-Traded Funds (ETFs)

3 amazing ASX tech ETFs for growth investors

Let's see why these funds could be worth considering if you're looking for growth.

Read more »