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.
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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.
