ASX dividend shares are a simple way for Australian investors to earn a regular passive income.
But because there are so many on offer, all yielding different amounts, it can be difficult to find the best ones to invest in.
Here are two of my top ASX dividend stock picks. And they all both pay their shareholders a yield of 8% or more.
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BetaShares Australian Top 20 Equities Yield Maximiser Complex ETF (ASX: YMAX)
Unlike many ASX shares listed on the sharemarket, YMAX is an ASX-listed exchange-traded fund (ETF). That means that it's not a straight company stock, but instead it gives its shareholders exposure to Australia's 20 largest blue-chip shares.
The fund uses a covered call strategy to generate extra income that is typically higher than dividend yields alone. It generally offers lower volatility than a direct investment in the underlying shares. It does not aim to track an index.
YMAX's largest allocation is to the financial sector, which accounts for 45.8% of its allocation at the time of writing. The materials sector is second, accounting for 22.7% of the ETF.
The fund also invests into the consumer discretionary, consumer staples, energy, industrials, real estate, communications, and healthcare sectors.
Aside from diversification, YMAX offers another perk that many other ASX shares on the index don't. It pays its shareholders a dividend every single month.
As of the 31st of July, the YMAX ETF has a 12-month gross distribution yield of 8.6%, and a net yield of 7.3%. The total franking level is 41.2%.
The ASX dividend share's most recent dividend was a 5 cents per unit payment to shareholders in mid-August. It has paid between 3.5 cents and 5 cents per share since it moved to monthly payouts in February this year. Prior to this, YMAX paid shareholders on a quarterly basis.
Metrics Master Income Trust (ASX: MXT)
The Metrics Master Income Trust is a listed investment trust (LIT) which gives direct exposure to the Australian corporate loan market. This is a space currently dominated by regulated Australian banks.
Rather than owning a portfolio of ASX shares, the trust has a portfolio of corporate loans and private credit investments (an increasingly popular asset class for income-focused investors). It currently manages around $40 billion in assets.
Metrics Master Income Trust said it targets a return of the Reserve Bank cash rate plus 3.25% per annum through the economic cycle. This is net of around 7.60% per annum fees.
Distributions are paid monthly, and there is also a distribution reinvestment plan (DRP). The plan allows its investors to reinvest their monthly income distributions.
The Trust's most recent unfranked dividend of 1.44 cents was paid to shareholders earlier this month. The latest dividend means that the fund has paid 12 dividends to investors over the past 12 months, totalling 15.8 cents per share. At the time of writing, this gives the trust a dividend yield of 8.18%.
