A changing environment 

Research from Betashares shows that the economic climate is shifting in favour of income instead of growth.

Elevated valuations, a shifting interest rate environment and recent tax changes are all impacting the potential of growth investing.

ASX dividend shares could be a strategic play in this current landscape. 

They provide investors with regular income even when the broader ASX 200 is experiencing weaker price performance. 

They may also offer greater exposure to established, cash-generative businesses. 

Importantly, investing in ASX dividend shares doesn't mean just chasing the highest yield. 

For long-term investors, finding companies with a consistent track record of dependable payments is vital. 

Here are three options that could provide consistent cash flow for dividend investors to consider. 

Wesfarmers Ltd (ASX: WES)

Wesfarmers is a diversified company with broad retail operations in home improvement and outdoor living, apparel, general merchandise, office supplies, and health and wellbeing, alongside a chemicals, energy and fertilisers business.

It is the company behind household-name retailers like Bunnings Warehouse, Kmart Australia, Officeworks, Priceline, and more.

It is ideal for dividend investors because it owns established, cash-generative businesses. 

Wesfarmers is one of the true, blue-chip ASX companies and has a well-established record of regular, fully franked dividends extending back decades, including occasional special payouts.

Transurban Group (ASX: TCL)

Another strong option amongst ASX dividend shares is Transurban Group. 

It is one of the world's largest toll-road operators, managing and developing urban toll-road networks in Australia and North America. 

Its toll-road assets generate recurring cash flows that, at the time of writing, translate into a yield of roughly 5%. 

Right now, its shares are looking attractively valued after falling 15% from yearly highs. 

This could provide investors with passive income and capital growth. 

Betashares Australian Dividend Harvester Fund (ASX: HVST)

In addition to individual ASX dividend shares, ASX ETFs focused on high yields can be a great vehicle for consistent long-term income. 

This Betashares dividend harvester fund is worth considering.

It aims to provide franked income that exceeds the broad Australian share market's net income yield, along with exposure to a diversified portfolio of Australian shares.

Importantly, it pays distributions monthly, providing a more consistent income stream than many individual stocks. 

At the time of writing it offers a yield over 5%. 

The post 3 top ASX dividend shares to target this week for lifelong income appeared first on The Motley Fool Australia.

For much of the past two decades, Australian investors were rewarded for prioritising capital growth. 

However several headwinds are now changing this landscape. 

High valuations, a shifting interest rate environment and recent tax changes are all impacting the potential of growth investing. 

Why growth was king

According to the report, In the decade to 2026, the economy enjoyed an average RBA cash rate of 1.8%, less than half of the 4.6% average since 1990. 

This meant debt was cheap, and businesses and investors alike were awash with cash to invest and expand.

While growth benefited from low interest rates, income suffered. Savings accounts paid lower interest, and Australian government 10-year treasury bonds paid an average of just 2.7%.

On top of this, the 50% capital gains tax (CGT) discount effectively halved the amount of CGT paid by investors since 1999, as long as the asset being sold had been held for over a year. This encouraged investing for capital growth.

What's changing?

Betashares said that three factors are pushing income back into focus.

Firstly, interest rates have raised the floor for income. 

Higher rates mean savings accounts and government bonds can now offer attractive yields, making income investments more competitive.

Secondly, tax changes have narrowed growth's advantage. 

Changes to capital gains tax from 2027 will reduce some of the tax benefits of growth investing, narrowing the gap between growth and income strategies.

Finally, higher valuations raise the bar for future growth. 

ASX 200 valuations are well above pre-pandemic levels, meaning investors are paying more for each dollar of earnings and future growth may be harder to achieve.

In short, with income yields higher, growth's tax advantage reduced, and valuations elevated, income investing is looking increasingly attractive relative to growth investing.

You don't have to pick one or the other

It's important for investors to understand this doesn't mean you need to abandon growth equities and only focus on income. 

The more useful question is not whether to be a growth investor or an income investor, but whether you are being deliberate about where your returns come from. A portfolio that earns income through dividends, bonds or high-yield savings alongside capital growth is no longer a conservative retreat, but a considered response to a landscape that looks meaningfully different to the one we navigated for the past decade.

For investors looking to target high-yield companies, there are several ASX ETFs to consider. 

Income focussed funds include: 

• Betashares S&P Australian Shares High Yield ETF (ASX: HYLD)
• Betashares Australian Dividend Harvester Fund (ASX: HVST)
• BetaShares Australian Top 20 Equities Yield Maximiser Complex ETF (ASX: YMAX).

The post Why it could be time to shift from growth to income: Expert appeared first on The Motley Fool Australia.

So how much do you need? What most of us aim for is a comfortable retirement, which means something different to everyone.

But it's fair to say that an income stream of $3,000 per week would provide a standard of living most people would deem very comfortable.

How much is needed for a comfortable retirement?

Indeed, the Association of Superannuation Funds of Australia (ASFA) estimates singles will need $55,923 per year to fund a comfortable retirement. So $3,000 per week, or $156,000 per year, is well above this.

The ASFA figure does assume a retiree owns their own home and draws a part pension from the age of 67 when they become eligible.

So, how much superannuation would you need to generate $3,000 per week in passive income?

For simplicity's sake, I will assume that a retiree is living off of dividends and not drawing down any capital.

Naturally, how much you would need in superannuation savings depends on what sort of dividend yield you can regularly rely on.

If the figure was just 5%, you would need $3.12 million in superannuation savings.

I would argue that this figure is too low, as retirees who are paying a zero per cent tax rate get the benefit of franking credits – that is, they get paid back the tax already paid by the companies whose shares they own.

In practice, this means that if a company is paying a 5% dividend yield, what is called the "grossed up" yield comes out at 7.14%.

If you were able to maintain a 10% dividend yield, you'd only need $1.56 million in superannuation, but I'd argue that somewhere in the middle, let's call it 7.5%, is realistic.

At this level you'd need $2.08 million in retirement savings.

Which shares deliver good dividend yields?

So, what are some shares you might consider investing in to deliver these sorts of returns?

Keep in mind that companies with excessively high returns might not be able to sustain them over time.

A class of shares that tends to offer stability over time is infrastructure. In this sector, gas pipeline operator APA Group Ltd (ASX: APA) pays a 5.29% dividend yield, 31% franked, while toll roads operator Atlas Arteria Ltd (ASX: ALX) pays 8.84% with no franking.

Among financial services stocks, Regal Partners Ltd (ASX: RPL) is paying 11.15%, fully franked, while among the banks, Westpac Banking Corporation (ASX: WBC) is paying 4.4%.

Retailer Universal Store Holdings Ltd (ASX: UNI) is paying 5.67% (fully franked), while major retailer Coles Ltd (ASX: COL) is paying 3.29% fully franked.

There are also a diverse array of exchange traded funds such as the Betashares Australian Dividend Harvester (ASX: HVST) which are focussed on dividend payouts, with this one yielding 5.53%.

So as you can see, it's possible to build a portfolio returning a decent yield, which can help hit your income targets.

The post How much is needed in superannuation for $3,000 in weekly passive income? appeared first on The Motley Fool Australia.

Having a reliable passive income stream can be a pathway to early retirement, provide funding for holidays or big purchases, or to supplement your superannuation.  

What kind of investor should be targeting passive income?

Passive income is often a key priority for retirees, particularly those looking to supplement their superannuation and create a more reliable income stream. 

However, income-focused investing isn't just for retirees.

Investors at other stages of life may also benefit from building a portfolio that generates regular dividends and distributions, whether to help fund living expenses, reinvest and compound returns, or create greater financial flexibility over time. 

For ASX investors, companies with a track record of paying sustainable dividends can therefore appeal to a broad range of investors – not just those already relying on their investments for income.

With that in mind, here is a hypothetical pathway to generating $2,000 a month in passive income with just two trades.

The portfolio 

Generating $2,000 a month in passive income will require some significant capital investment. 

However, it is certainly achievable with a combination of two ASX ETFs. 

The strategy is to target high-yield ASX ETFs that pay monthly distributions. 

The two that stand out are BetaShares Australian Top 20 Equities Yield Maximiser Complex ETF (ASX: YMAX) and Betashares Australian Dividend Harvester Fund (ASX: HVST). 

The YMAX fund aims to generate attractive monthly income and reduce the volatility of portfolio returns by implementing an equity income investment strategy over a portfolio of the 20 largest blue-chip shares listed on the ASX. 

Meanwhile, the HVST fund follows a rules-based 'dividend harvest' strategy that seeks to maximise its exposure to dividend-paying Australian shares.

The YMAX fund currently offers a 12 month gross distribution yield of 8.6%. 

The HVST fund currently offers a 12 month gross distribution yield info 7.1%. 

How much do you need to invest?

For a simple hypothetical calculation, we can assume the portfolio is split equally between the two ETFs. 

A split allows some breathing room should one fund reduce its distribution.

With an average gross distribution yield of 7.85%, an investor would need around $305,700 invested to generate $24,000 a year, or $2,000 a month, in gross income. 

Put simply, $152,850 invested in each fund would generate approximately $12,000 per year from each fund, assuming the stated yields were maintained. 

Of course, distributions can change over time, and this example doesn't account for tax, franking credits, brokerage or changes in the ETFs' market prices.

Foolish takeaway 

Most investors won't have $300,000 or more sitting around ready to invest, and that's okay. 

Building a meaningful passive income stream is typically a long-term process rather than something that happens overnight. 

By making consistent contributions to income-generating investments and reinvesting distributions, investors can gradually build their capital base and move closer to their passive income goals.

The post How to earn $2,000 a month in passive income with this simple portfolio appeared first on The Motley Fool Australia.

There are plenty of options available, too. From major Australian blue-chip companies, to defensive stocks, real estate investment trusts (REITs) and energy infrastructure or utility operators, many ASX-listed companies have a long history of paying their shareholders a regular and reliable dividend payment.

Here are two ASX dividend shares I'd buy right now, both of which I believe are positioned to pay attractive passive income for years.

Origin Energy Ltd (ASX: ORG)

Origin is an ASX dividend share favourite of mine.

The leading ASX energy company provides Australian homes and businesses with electricity, natural gas, solar and LPG. 

Given energy is an essential service, the stock is classically defensive. This means its shares are generally resilient to sharemarket volatility, global uncertainty and fluctuating sentiment. After all, people won't stop powering their homes and businesses because the purse strings have tightened.

Origin's assets operate under long-term contracts, often with rising income, which gives it another defensive quality.

Its defensive nature makes the company's shares a great option for passive income, as they can generate substantial cash flows even when energy prices are elevated. 

And this directly benefits its shareholders. 

Origin has historically paid its shareholders every six months, consisting of an interim dividend in March and a final dividend in September.

In the first half of FY26, Origin Energy paid its investors 30 cents per share, fully franked. 

Brokers forecast that the energy business will increase its annual payout to 61 cents in FY26, translating to a forward yield of around 5.05%, including franking credits, at the time of writing.

Betashares Australian Dividend Harvester Fund (ASX: HVST)

The Betshares HVST is another ASX dividend share to consider. HVST is an ASX-listed exchange-traded fund (ETF) that invests in 40 to 60 dividend-paying companies. These are selected from the top 100 largest ASX-listed companies based on their dividend forecasts, franking credits, and expected future gross dividend payments.

The ETF does not track an index; instead, it targets exposure to high-dividend stocks.

The fund is structured to own a dividend-paying share until it trades ex-dividend. At this point, the fund sells the shares and reinvests the proceeds into its next opportunity.

YMAX is mostly weighted into the financial sector, which accounts for 26.9% of its allocation at the time of writing. The materials sector is second, accounting for 10.1% of its allocation.

The fund also invests into diversified metals & mining, consumer discretionary, energy, industrials, real estate, communications, and healthcare sectors. 

HVST ETF pays investors a regular, franked dividend income that is significantly higher than the annual income yield of the broader ASX. 

As of the 31st of July, its 12-month gross distribution (dividend) yield is 7.1%, and the net yield is 5.6%. The franking level is 63.3%. The fund's annual management fee and costs are 0.72%.

The fund paid out $0.06 per share to investors earlier this month. In fact, the fund has paid around $0.06 per share each month since January 2024.

The post 2 ASX dividend shares I'd buy right now for passive income appeared first on The Motley Fool Australia.

Aiming for a $2,500 per week passive income stream from your superannuation savings would give a comfortable retirement – at least as measured by the Association of Superannuation Funds of Australia, which estimates singles will need $55,923 per year to fund a comfortable retirement.

The amount you deem a comfortable retirement will depend on the sort of lifestyle you are after, but the ASFA standard, which assumes you own your own home, envisages the ability to pay for top-level health cover, to own and maintain a reasonable car, and to travel occasionally.

Superannuation by the numbers

So how much superannuation would you need to generate $2,500 per week, or $130,000 per year, in passive income?

For simplicity's sake, I will assume that a retiree is living off of dividends and not drawing down any capital.

If this were the case, if it was possible to earn a 10% dividend yield – a lofty ambition – you would need $1.3 million in superannuation.

If you were earning 5%, that figure would double to $2.6 million.

I'd argue that, taking into account franking credits, a return of about 7.5% is a realistic proposition.

In this case, you'd need a superannuation balance of $1.73 million.

Stocks in focus

So, what sort of companies might pay dividends that would help hit the $2,500-per-week target?

Personally, I'm a fan of the funds in the Wilson Asset Management stable, including WAM Strategic Value Ltd (ASX: WAR), which pays a fully franked dividend yield of 5.6%, and WAM Active Ltd (ASX: WAA), which pays 6.98%.

Dividend-focused ETFs can be a good choice also, with Betashares Australian Dividend Harvester (ASX: HVST) paying 5.48% and the Global X S&P/ASX200 High Dividend ETF (ASX: ZYAU) paying 4.25%.

Universal Store Holdings Ltd (ASX: UNI) has also traditionally paid high dividends with a current yield of 4.97%, while among the miners Fortescue Ltd (ASX: FMG) is paying 6.09%.

And among the banks, Westpac Banking Corp (ASX: WBC) is paying 4.52% fully franked, while Bank of Queensland Ltd (ASX: BOQ) is paying 6.25% also fully franked.

How to boost your superannuation balance

If you're a bit low on your superannuation at the moment, consider either salary sacrificing into your super, or making a concessional contribution.

This year, the concessional contributions cap has increased to $32,500, meaning you can contribute up to this amount and pay only 15% tax. However, keep in mind that the $32,500 level includes any contributions made by your employer and any salary sacrifice amounts.

The post How much is needed in superannuation for $2,500 in weekly passive income? appeared first on The Motley Fool Australia.

The majority of them distribute cash to their shareholders every 6 or 12 months. But did you know there are a handful of shares that pay out much more frequently?

Here are three of my favourite ASX shares that pay dividends every month.

BetaShares Dividend Harvester Active ETF (ASX: HVST) 

HVST is an ASX-listed exchange-traded fund (ETF) that provides investors with exposure to a portfolio of up to 60 dividend-paying shares. It doesn't track an index; instead, it targets exposure to high-dividend stocks drawn from the 100 largest ASX-listed companies.

Its portfolio is mostly weighted into the financial sector, which accounts for 26.9% of its allocation at the time of writing. The materials sector is second, accounting for 10.1% of its allocation.

And the fund is structured so that it can own a share until it trades ex-dividend. At this point, the fund sells the shares and reinvests the proceeds into its next passive income-generating shares.

HVST pays its shareholders a franked dividend income every single month.  As of the 31st of July, its 12-month gross distribution (dividend) yield is 7.1%, and the net yield is 5.6%. The franking level is 63.3%. The fund's annual management fee and costs are 0.72%.

The fund paid out $0.06 per share to investors earlier this month. In fact, the fund has paid around $0.06 per share each month since January 2024.

At the time of writing, HVST shares are up around 1% year to date and trading at $13.65 per share.

Metrics Income Opportunities Trust (ASX: MOT)

The MOT is a listed investment trust  (LIT) with a portfolio of private credit and related opportunities. Its portfolio can give investors direct exposure to private credit investments, which have become an increasingly popular asset class.

The Trust said its investment objective is to provide monthly cash income, preserve investor capital, and manage investment risks. It also seeks to provide upside potential through investments in private credit and other assets. These "other assets" include warrants, options, preference shares, and equity.

The Trust targets a cash yield of 7% per year, paid monthly. It has a total target return of 8% to 10% per year, net of fees and expenses. 

The Trust also has a distribution reinvestment plan (DRP), which allows its shareholders to reinvest their monthly income distributions.

The ASX dividend share's most recent payout to shareholders was an unfranked 1.11-cent dividend paid earlier this month. The Trust paid out 2.62 cents in July, 1.16 cents in June, and 1.22 cents in April. This translates to a dividend yield of around 9.5%, at the time of writing.

At the time of writing, MOT shares are down around 14% year to date and trading at $1.62 per share.

Plato Income Maximiser Ltd (ASX: PL8)

Plato is another LIC, but one that specifically targets income-focused investors, such as retirees and SMSF investors, who need a dependable income stream. 

The ASX dividend stock holds a portfolio of mature ASX-listed equities, cash, and listed futures. It mostly focuses on Australian companies with strong dividend payouts, such as major banks, mining giants, and energy firms. 

Its goal is to generate a high, franked income stream for investors and to consistently deliver above-market dividends and total returns, including franking credits. 

Plato has consistently paid fully-franked dividends of 0.55 cents per share every month since April 2022. That equates to an annual running total of 6.6 cents per share in fully-franked passive income, yielding around 4.6%.

At the time of writing, Plato shares are trading at $1.40 each, down around 4% for the year to date.

The post 3 ASX dividend shares that pay their investors every single month appeared first on The Motley Fool Australia.

Figures released by the Association of Superannuation Funds of Australia show that on average, people do not have enough in their superannuation for what they deem to be a comfortable retirement.

If you're keen to figure out how much you can expect to have in your superannuation when you retire, be that at age 60 or later, there are plenty of calculators around; however, I'd suggest the Federal Government's MoneySmart website as the one to use.

How much income can I generate from my superannuation?

Looking at a lump sum of $800,000, the good news is that it's well above the $630,000 ASFA says you need for a comfortable retirement as a single person.

Keep in mind that ASFA assumes you own your own home and draw a part of the Age Pension.

So how much could you expect to earn from your $800,000 in investments?

If you are simply drawing dividends and not drawing down any of the capital, the sums are quite simple.

If you can earn a 10% yield – which would be ambitious – you would earn $80,000, while if you were earning a 5% yield, the amount would be $40,000.

I'd suggest a yield somewhere between these two is achievable, so let's assume a 7.5% return, which would return $60,000.

What makes this even more realistic is that once you are retired, your tax rate on your superannuation drops to zero, and you get the full benefit of franking credits.

This means that if a share pays a 5% yield, the retiree receives a yield of 7.14% once franking credits are added back in.

Franking credits compensate shareholders for tax already paid by the company.

Which shares generate good income streams?

So, what are some shares that might be worth owning if you're aiming for these sorts of returns?

A consistent high dividend payer is Universal Store Ltd (ASX: UNI), which is currently paying right on 5%, while Regal Partners Ltd (ASX: RPL) just declared an improved first-half dividend and is paying an annualised rate of 9.7%.

The Betashares Australian Dividend Harvester ETF (ASX: HVST) is paying 5.54%, while another dividend-focused fund, WAM Income Maximiser Ltd (ASX: WMX), is paying 4.29%.

Among the blue-chip shares, BHP Group Ltd (ASX: BHP) is paying 3.72%, while Telstra Ltd (ASX: TLS) is paying 4.43%, and Woodside Energy Group Ltd (ASX: WDS) is paying 4.89%.

So as you can see, there are plenty of companies paying healthy dividends, which can help you attain your income aspirations.

The post How much passive income can I earn off my $800,000 superannuation balance? appeared first on The Motley Fool Australia.

However a new report from Global X has shed light on how a changing market is causing many investors to reassess that strategy.

Key market changes 

Rising interest rates, falling home prices and the Federal Government's changes to negative gearing and capital gains tax (CGT) concessions are reshaping the economics of property investing. 

According to Global X, investors are increasingly turning to alternative sources of income, particularly exchange-traded funds (ETFs). 

ETFs offer access to dividends, bond yields and infrastructure income without the costs and complexity of owning property.

The shift is already showing up in the data.

The latest ABS Lending Indicators report revealed that investor housing activity weakened significantly in the June quarter. The number of new investor loan commitments fell 8.6%, while the value of investor loans declined 10.2% to $37.1 billion. That was by far the largest fall among major borrower groups and marked the sharpest quarterly decline in investor lending since 2022.

While property investors are pulling back, money is flowing strongly into income-focused investment products.

Property is becoming less attractive 

Global X highlighted that residential property has traditionally rested on two pillars: rental income and capital growth. Today, both are facing headwinds.

Borrowing costs remain elevated, reducing the cash flow generated by investment properties. Meanwhile, Australia's housing market is beginning to lose momentum. Cotality's national Home Value Index fell 0.7% in July, the largest monthly decline since December 2022. Major banks are reporting that mortgage applications have also fallen by as much as 20% since Budget night, highlighting weaker investor appetite.

Additionally, The Federal Government's changes to negative gearing and CGT have added another layer of pressure. 

While investors once relied on generous tax benefits to enhance after-tax returns, the reduction of these incentives means many are now taking a closer look at whether property still delivers the income and return profile they need.

These factors are pushing income investors towards a different asset class. 

Income ASX ETFs

According to Global X's latest ETF Market Scoop, Australian investors allocated a record $6.8 billion into ETFs in July alone, making it the strongest month on record for the industry. 

The report also revealed which type of ASX ETFs investors found most appealing.

Income-focused ETFs attracted a record $1.8 billion, including a record $1.4 billion into bond ETFs.

This surge suggests investors are actively seeking income opportunities outside traditional property investments.

Unlike residential property, income ETFs can provide diversified exposure to dozens or even hundreds of underlying securities through a single investment. Depending on the strategy, investors can access income from government bonds, corporate bonds, listed infrastructure, dividend-paying companies or a combination of these assets.

For investors accustomed to relying on rental income, these products offer an alternative source of regular cash flow without tenant management, maintenance costs, land tax or the need to take on large amounts of debt.

Investors seeking income-oriented ASX ETFs have several options to consider: 

• Global X S&P/ASX 200 High Dividend ETF (ASX: ZYAU)
• Betashares Australian Dividend Harvester Fund (ASX: HVST)
• Betashares S&P Australian Shares High Yield ETF (ASX: HYLD). 

The post The property market is cooling: Here's how income investors are adapting appeared first on The Motley Fool Australia.

Rather than having to research and buy multiple stocks, you can get that diversity, and more, from an ETF.

Below we look at two ETFs that DP Wealth Advisory's Andrew Wielandt recently issued buy recommendations for (courtesy of The Bull).

ASX ETF offers international stock exposure

The first ASX ETF Wielandt has a bullish outlook on is Betashares Global Royalties ETF (ASX: ROYL).

"ROYL is a diverse exchange traded fund operating across a number of countries, including the United States, Canada, Brazil and Denmark," he said.

"It holds about 40 companies, with investments including ARM Holdings PLC, Texas Pacific Land Corporation and Wheaton Precious Metals at August 11, 2026," he added.

Summarising his buy recommendation on ROYL, Wielandt concluded:

ROYL focuses on companies earning royalty and intellectual property income. What appeals is relatively steady returns compared to other cyclical investments. The company posted a return of 15.59% after fees in the past 12 months to July 31, 2026.

Which brings us to…

Exchange traded fund with an ESG bent

The second ASX ETF Wielandt recommends buying will hold particular appeal to investors who place a high value on companies' environmental, social, and governance (ESG) standards.

The fund in question is the Munro Climate Change Leaders Fund Active ETF (ASX: MCCL), which Wielandt noted that he holds in is own self-managed super fund.

"This exchange traded fund holds a concentrated portfolio of companies aiming to benefit from decarbonisation during the next decade," he said.

According to Wielandt:

The ETF holds between 15 and 25 positions involved in clean energy, clean transport and energy efficiency. The fund posted a return of 16.9% for the 12 months to July 31, 2026. However, given its highly concentrated nature, it's important to note that returns can be volatile.

In our view, MCCL can also be considered an investment in the future and can be part of a balanced portfolio.

A bonus passive income ETF

If it's passive income you're targeting, then you might want to look into the BetaShares Australian Dividend Harvester Fund (ASX: HVST).

This ASX ETF gives investors instant exposure 40 to 60 high-yielding, blue-chip ASX shares.

And HVST pays out dividends every month, so your next income payout is never too far away.

As at 31 July the HVST had 12-month trailing yield of 5.6%, 63% franked. Taking those franking credits into account, the grossed-up yield comes out to 7.1%.

The post Expert names 2 top ASX ETFs to buy today appeared first on The Motley Fool Australia.

Data from S&P Global shows Australia has historically been one of the highest-yielding equity markets in the world. 

A great way to gain exposure to these high yields is through ASX ETFs. 

The ETF advantage 

Investors have long looked to banks, insurers and miners for strong dividends. 

However the problem with individual dividend shares is that investors are exposed to the fortunes of a relatively small number of companies. 

A dividend cut from one major holding can have a meaningful impact on your income, while concentrating too heavily in one sector can also increase risk.

Dividend-focused ETFs offer a simple way to spread that risk across a basket of companies in a single investment. 

They can provide exposure to dozens of dividend-paying businesses, while also taking much of the stock-picking work out of building an income-focused portfolio.

Of course, not all dividend ETFs are created equal. 

Investors should consider the underlying holdings, fees, dividend history, diversification and whether the ETF's strategy is designed to provide a sustainable income stream rather than simply chase the highest possible yield.

With that in mind, here are three great options to consider right now. 

Betashares Australian Dividend Harvester Fund (ASX: HVST)

HVST aims to deliver a high level of franked income that exceeds the net income yield of the broader Australian share market over the long term, while providing investors with diversified exposure to Australian shares.

One key advantage of this fund is its monthly distributions. 

This creates a more consistent passive income stream than individual shares, which usually pay dividends semi-annually. 

At the time of writing, it offers a 12-month gross distribution yield of roughly 7%. 

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

HYLD ETF is another great ASX ETF for dividends.

It aims to track the performance of an index (before fees and expenses) that provides exposure to a share portfolio of 50 high-yielding Australian companies.

The fund also provides monthly distributions. 

It currently offers a 12 mth gross distribution yield of approximately 5%. 

BetaShares S&P 500 Yield Maximiser Fund (ASX: UMAX)

While Australian shares offer great yields, this fund looks to provide high dividends through international stocks. 

UMAX aims to generate attractive monthly income and reduce the volatility of portfolio returns by implementing an equity income investment strategy over a portfolio of stocks comprising the S&P 500 Index.

It also provides monthly distributions and currently offers a 12-month distribution yield of over 5%. 

The post 3 of the best dividend ASX ETFs right now for passive income appeared first on The Motley Fool Australia.

Rather than having to research and buy a dozen or more dividend paying stocks, you can get that diversity, and more, from an ETF with a single investment.

I mention buying a dozen or more dividend stocks because you don't want to simply buy one or two high yielding companies. While that may work out in the shorter-term, even quality companies with a good track record of annual dividend payouts can run into headwinds that could slash the passive income you were expecting to bank.

While ASX ETFs don't remove all of that risk, they do work to help smooth your returns over time.

With that said…

Two top passive income ASX ETFs to buy today

The first fund I'd buy is the BetaShares Australian Dividend Harvester Fund (ASX: HVST).

One of the appealing things for passive income investors is that this ASX ETF gives investors instant diversity through its portfolio of 40 to 60 high-yielding, blue-chip ASX shares. The fund's management team screens these for high dividend and franking outcomes based upon expected future gross dividend payments.

As of 31 July, the ASX ETF's top three holdings are Commonwealth Bank of Australia (ASX: CBA) BHP Group Ltd (ASX: BHP) and Wesfarmers Ltd (ASX: WES).

And HVST pays out dividends on a monthly basis, so your next passive income payout is never too far away.

Because the ETF's holdings are actively managed and rebalanced every three months to target higher yielding ASX dividend stocks, the annual management fee is 0.72%.

As at 31 July the HVST had 12-month trailing yield of 5.6%, 63% franked. Those franking credits bring the grossed-up yield to 7.1%.

Which brings us to the second ASX ETF I'd buy to target $10,000 a year in passive income, the iShares S&P/ASX Dividend Opp ESG Screened ETF (ASX: IHD).

IHD provides exposure to 50 of the highest-yielding shares on the S&P/ASX 300 Index (ASX: XKO). The fund will appeal to ESG investors, with management screening stock selection to avoid companies engaged in serious ESG controversies.

As at 31 July, IHD's top three holdings are BHP Group Ltd (ASX: BHP), Rio Tinto Ltd (ASX: RIO), and Australia and New Zealand Banking Group Ltd (ASX: ANZ).

IHD trades on a 4.1% trailing dividend yield, franked at around 76%. That equates to a 5.5% grossed-up yield.

How much do I need to invest today?

Working with the grossed-up trailing dividend yields here – and taking note that future yields could be higher or lower – just how much would you need to invest in these two ASX ETFs for $10,000 a year in passive income?

Well, assuming you invest the same amount in each fund, then you'll receive an average grossed-up yield of 6.3%.

So, for $10,000 a year in passive income, you'd need to invest $158,730 today.

You can also invest a smaller amount on a monthly basis, and you'll reach your income goal in good time.

The post Why I'd buy these 2 ASX ETFs for $10,000 a year in passive income appeared first on The Motley Fool Australia.

While many investors target high dividends through investing in individual stocks, there are several reasons ETFs can be a better choice. 

Why target ASX ETFs for passive income?

Dividend ETFs can provide diversification, regular distributions and a relatively hands-off approach to generating income. 

For investors focused on passive income, they can be an attractive alternative to picking individual dividend stocks – particularly when the goal is to build a portfolio designed to produce income over the long term.

An individual company can suddenly cut or suspend its dividend due to falling profits or financial pressures. 

Meanwhile, an ETF spreads your investment across multiple dividend-paying companies, reducing the impact of any one company cutting its payout.

Additionally, some income ETFs pay distributions monthly, providing a more consistent payout. 

With that in mind, here are three great options to consider. 

BetaShares Australian Top 20 Equities Yield Maximiser Complex ETF (ASX: YMAX)

YMAX ETF aims to generate attractive monthly income and reduce the volatility of portfolio returns by implementing an equity income investment strategy over a portfolio of the 20 largest blue-chip shares listed on the ASX. 

YMAX does not aim to track an index.

Its 12-month distribution yield currently sits at 7.3%. 

This means a $10,000 investment would provide passive income of $730 in annual income, or about $61 per month, assuming the yield remains unchanged.

Vanguard Australian Shares High Yield ETF (ASX: VHY)

VHY ETF offers low-cost exposure to a diversified portfolio of ASX-listed companies with higher expected dividend yields. It aims to provide long-term capital growth alongside income, while limiting concentration risk by capping exposure to individual companies and industries.

The current trailing distribution yield is 3.6%, which means a $10,000 investment would generate approximately $360 per year in passive income. 

It is also worth noting this ASX ETF has generated significant capital gains as well. 

The fund has climbed 13% in the last 12 months, and risen by an average of 10.5% per annum over 10 years.

It pays distributions quarterly. 

Betashares Australian Dividend Harvester Fund (ASX: HVST)

Another great option for income investors is this fund from Betashares. 

It aims to provide franked income that exceeds the net income yield of the broad Australian sharemarket on an annual basis, along with exposure to a diversified portfolio of Australian shares.

The fund also offers monthly distributions, creating a more consistent income stream than individual stocks. 

It currently offers an annual distribution return of 5.58%, which would mean an annual income of $558 – or $46.5 per month. 

The post $10,000 invested in these dividend ETFs will bring how much passive income? appeared first on The Motley Fool Australia.

But what is a comfortable level of income?

How much superannuation do you really need?

While it's relatively subjective, the Association of Superannuation Funds of Australia (ASFA) has run the numbers and arrived at a figure that they consider sufficient for both singles and couples to have a comfortable retirement.

This measure, which assumes you own your own home, includes the ability to pay for top-level private health insurance and doctor visits, fast internet, a reasonable car and associated maintenance, regular leisure activities and the ability to travel occasionally.

To afford this, singles would need to earn $55,923 in superannuation income, while a couple would need to earn $78,556.

Today I'm looking at the amount of superannuation savings needed to generate $6,000 per month, or $12,000 per year, well above the level considered comfortable for a single person.

So let's look at the numbers.

Just to get started with round numbers, if you can generate a 7.2% return from your superannuation savings, you'd need $1 million worth of investments.

While this might sound like a high return, remember that superannuation funds benefit from franking credits – in lay terms, they are paid back the tax already paid by a company on its earnings.

Meanwhile, if you generate just a 5% return on your investments, you'd need $1.44 million in superannuation savings, while if you were able to generate 10% returns, the figure drops to just $720,000.

I'd argue that a 7.5% return, the midpoint of these two, is a realistic return to target, for which you'd need $960,000 in superannuation savings.

Keep in mind that all of these figures are based on dividend returns only, and don't assume any share sales take place.

So, what shares could you buy to deliver such returns?

Recently I've been keeping my eye on the funds managed by Wilson Asset Management, which have been paying decent dividends.

Just this week the WAM Strategic Value Ltd (ASX: WAR) fund announced that it had increased its dividend, and would now be paying a yield of 5.9%, rising to 8.4% once franking credits were included.

WAM Active Ltd (ASX: WAA) also recently increased its dividend and is paying out an identical yield to WAM Strategic Value.

When it comes to operating businesses as opposed to funds, Regal Partners Ltd (ASX: RPL) is a good option, with broker Morgans forecasting the financial services company will pay out 8.1% for this year, followed by 6.9% and 7.8% in the following years.

Among resources stocks Fortescue Ltd (ASX: FMG) is paying a 6.59% yield while Woodside Energy Group Ltd (ASX: WDS) is paying 5.02%, both fully franked.

And among the ETFs, there is the Betashares Australian Dividend Harvester Fund (ASX: HVST), which is paying 7.3% grossed up, or including franking credits.

The post How much is needed in superannuation to target a $6,000 monthly passive income? appeared first on The Motley Fool Australia.

Typically, ASX ETFs track indexes like the S&P/ASX 200 Index (ASX: XJO) or target niche themes.

However there are also funds designed to provide consistent and high dividend yields. 

Why ASX ETFs rather than individual shares?

For many retirees, high-dividend ASX ETFs can provide a practical way to generate a regular income stream while maintaining broad exposure to the Australian share market. 

These ETFs typically invest in established companies with a history of paying consistent dividends. 

This helps investors diversify across multiple businesses rather than relying on a handful of individual stocks. 

They also don't require the ongoing portfolio management that often comes with targeting individual shares. 

In addition to potential dividend income, retirees may also benefit from long-term capital growth and, in some cases, franking credits that can enhance after-tax returns for eligible Australian investors. 

Two stand out options 

For those exploring the possibility of adding a high yield fund, there are two options I believe stand out. 

The first is the Betashares S&P Australian Shares High Yield ETF (ASX: HYLD), and the second is the Betashares Australian Dividend Harvester Fund (ASX: HVST). 

There are two key reasons these funds are attractive options for retirees. 

The first is the distribution frequency. 

Monthly payments 

For retirees, the biggest challenge often isn't just growing wealth – it's creating a reliable income stream that can supplement superannuation without having to regularly sell investments. That's where these two ASX-listed ETFs stand out.

One of the biggest advantages of both funds is that they pay monthly distributions. 

Most other funds and individual stocks pay quarterly or semi-annual payments to shareholders. 

For retirees, this can make a meaningful difference to day-to-day financial planning, providing a more regular stream of income to help cover recurring expenses.

Receiving income every month can also reduce the need to hold as much cash in reserve or sell investments to bridge the gap between larger, less frequent dividend payments. 

High yields 

Not only do these funds offer more consistent payments, they also offer comparatively high yields. 

Research shows the average yield for ASX 300 companies has recently hovered around 3.5%. 

Unlike broad market ETFs, which typically mirror the dividend yield of the overall sharemarket, these funds are specifically designed to maximise income. 

HYLD achieves this by investing in a portfolio of high-yielding Australian companies that pass quality and volatility screens, while HVST uses an active dividend harvesting strategy to capture dividend opportunities throughout the year. 

Both have recently offered yields over 7%. 

Although yields will vary depending on market conditions and company dividend payments, both funds have historically delivered income well above the broader Australian sharemarket, making them appealing options for retirees seeking to generate a stronger cash flow from their investment portfolio. 

The post Why these 2 ASX ETFs could be the best dividend funds for retirees appeared first on The Motley Fool Australia.

An income strategy can suit some investors

These funds generally target income over capital returns, and two of the three we're looking at today pay fully or partially franked dividends, making them particularly suited to retirees, who can benefit from franking credits.

Today, we'll have a look at these funds and how much of each you'd need to buy to generate $1000 per month in income.

First, let's look at the Betashares Australian Dividend Harvester Active ETF (ASX: HVST).

According to the Betashares website, HVST "aims to provide franked income that exceeds the net income yield of the broad Australian share market on an annual basis, along with exposure to a diversified portfolio of Australian shares''.

The website adds:

The Fund's share portfolio is generally selected from the largest 100 Australian shares on the ASX, screened for high dividend and franking outcomes based upon expected future gross dividend payments. The share portfolio is rebalanced approximately every three months, with the aim of including the shares that are expected, within the next rebalance period, to provide the highest gross yield outcomes.

HVST has a 12-month distribution yield of 5.8%, 62.8% franked, bringing the gross distribution yield to 7.3%.

In order to target $1000 per month, you would need to own 17,241 units of HVST using the 5.8% yield as the measure, which would cost $227,753 at the current unit price of $13.21.

Another solid performer in the field is the WAM Income Maximiser Ltd (ASX: WMX).

WAM recently increased its dividend payouts, from 0.66 cents per share this October to 0.68 cents per share in December, or 0.97 cents per share including the value of franking credits.

The fund manager's chair, Geoff Wilson, said the first full year of operation delivered a strong outcome for shareholders.

The fund's portfolio value also increased strongly, rising 17.8% from inception to the end of June 30.

To generate $1000 per month from WMX, you would need to own 151,515 shares, worth $262,121.

This fund is a standout performer

And finally, there is the KKR Credit Income Fund (ASX: KKC), which is currently paying a very healthy 9.82% income stream, albeit with no franking attached.

The fund targets a return of 6% to 8% through the business cycle and is currently outperforming that. It is targeting a 20-cent-per-share return in FY27.

To generate $1000 per month from KKC, you'd need to buy 60,000 shares, worth $127,200.

The post I'd buy these ASX ETFs for $1000 a month in passive income appeared first on The Motley Fool Australia.

For investors who are looking for an income stream rather than capital gains, it pays to go with Australian-based companies that have committed to paying dividends over the medium to long term, and exchange-traded funds specifically set up to pay high dividends.

How much do you need to generate $500 per week?

So, let's look at the yields you'll need for a $500 per week return. This, of course, translates to $26,000 a year.

So, what dividend yields do stocks normally pay?

According to S&P Dow Jones, the S&P/ASX 200 Index (ASX: XJO) delivered an average trailing dividend yield of 4.15% from July 2011 to December 2024.

But this includes plenty of companies that pay low or no dividends.

I'd argue it's quite possible to aim for a portfolio that delivers a dividend yield of around 5%, while also including some companies that pay a lot more.

At a 5% yield, you'd need a portfolio worth $520,000 to deliver $500 a week.

At a 7.5% yield you'd need just $346,666.

At a 10% yield you'd need just $260,000.

While there are stocks which pay more than a 10% yield, these are few and far between, and I'd argue that those sorts of yields are likely to be unsustainable.

What ASX shares can I invest in to achieve $500 in income?

On the ETF front, the Australian Dividend Harvester Active ETF (ASX: HVST) is currently paying a yield of 5.8%, which sits firmly in the ballpark of returns targeted.

There is also the Vanguard Australian Shares High Yield ETF (ASX: VHY) which has major holdings in BHP Group Ltd (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA) and Rio Tinto Ltd (ASX: RIO).

This ETF currently pays a dividend yield of 5.47%.

Another income-focused security is WAM Capital Ltd (ASX: WAM), which is currently paying a trailing dividend of 10.4%, 60% franked.

Among the miners Fortescue Ltd (ASX: FMG) pays a healthy trailing dividend of 6.37% currently, while toll roads operator Atlas Arteria Ltd (ASX: ALX) – should it survive a current takeover approach – has committed to paying a dividend of 60 cents per share, or well over 10%.

Three other companies which are currently paying out better than 5% dividends are AGL Energy Ltd (ASX: AGL), APA Group (ASX: APA), and Stockland Corporation Ltd (ASX: SGP).

Other solid companies which pay a bit less than we're after are Telstra Ltd (ASX: TLS) with a yield of 3.93% and Westpac Banking Corporation (ASX: WBC) which pays a trailing yield of 4.37%.

So as you can see, with some diversification across stocks such as these, a 5% dividend yield appears to be within reach.

The post How to get started with a portfolio delivering $500 a week in passive income appeared first on The Motley Fool Australia.

Starting early and reaping the benefits of compound interest are key to ending up with a superannuation nest egg that will furnish you with a comfortable retirement, but it's good to know what that actually means.

The Association of Superannuation Funds of Australia (ASFA) regularly publishes its retirement standard, which currently estimates that homeowners aged 65 and over now need $77,375 annually for a comfortable retirement as a couple, and $54,840 for a single.

Using our yardstick of $1500 per week, this would put a single person firmly in comfortable territory, which is measured by assessing the affordability of things like top-level private health insurance, a reasonable car, and the ability to travel occasionally.

By the numbers

But how much in investments do you need to earn $1500 a week, or $78,000 a year?

Using a dividend yield of 5% per year, you'd need $1.56 million in your super to reap $78,000 a year, assuming there was no drawdown of capital.

So is 5% achievable? According to S&P Dow Jones, the S&P/ASX 200 Index (ASX: XJO) delivered an average trailing dividend yield of 4.15% from July 2011 to December 2024.

But this includes plenty of companies that pay low or no dividends. I'd argue it's quite possible to aim for a portfolio that delivers a dividend yield of around 5%, while also including some companies that pay a lot more.

You also have to take into account that for some retirees, superannuation earnings and distributions are tax-free.

Let's see how this affects the dividend payment of a company like Westpac Banking Corp (ASX: WBC).

Westpac pays a trailing dividend yield of 4.38%, according to the ASX website.

But Westpac has already paid 30% company tax on that dividend, which gets refunded to the retiree, boosting the dividend yield to 6.26%.

Aiming for income

There are also securities that aim specifically for a high dividend yield. One of these is the Australian Dividend Harvester Active ETF (ASX: HVST).

HVST aims "to exceed the net income yield of the broad Australian share market on an annual basis, paid monthly''.

Currently, its gross annual yield is running at 7.4%.

Another income-focused security is WAM Capital Ltd (ASX: WAM), which is currently paying a trailing dividend of 10.3%, 60% franked.

When it comes to companies, I've also recently written about three that are paying out better than 5%. These were AGL Energy Ltd (ASX: AGL), APA Group (ASX: APA), and Stockland Corporation Ltd (ASX: SGP).

At a 5% fully franked yield, the grossed-up yield increases to 7.1%, which would reduce the lump sum needed to generate a $78,000 yearly income to $1.09 million.

The post How much do I need in my superannuation to get $1500 per week in passive income? appeared first on The Motley Fool Australia.

Within their investment mix, retirees must also able to generate passive income through dividends without ignoring capital growth. 

Why dividend yields aren't the only factor

While passive income is an appealing goal for retirees, making it the sole focus of a portfolio can actually undermine long-term financial security.

 Chasing high-yield investments often means concentrating in sectors like REITs, utilities, or other dividend stocks. 

This can reduce diversification and expose the portfolio to significant capital losses if those sectors fall out of favour. 

More importantly, a retiree at 65 today may live another 25 to 30 years, meaning inflation remains a genuine threat. 

A portfolio generating strong income today but delivering little capital growth can slowly erode real purchasing power over time. 

Balancing income with growth gives retirees a larger asset base to draw from, more flexibility during market downturns, and a better chance of not outliving their money. 

The goal, ultimately, isn't just to generate cash flow, it's to sustain a comfortable lifestyle for retirement. 

This goal can be achieved through a simple two fund portfolio. 

The growth engine 

The iShares S&P 500 ETF (ASX: IVV) tracks the S&P 500, giving you exposure to 500 of the world's largest companies. 

This includes Apple Inc (NASDAQ: AAPL), Nvidia Inc (NASDAQ: NVDA) and hundreds more. 

Over the past 10 years, the fund has delivered roughly 15% annualised returns. 

For retirees with a 20-to-30-year time horizon (longer than most people assume), maintaining growth exposure is essential to prevent inflation eroding your purchasing power. 

At a management fee of just 0.04% per annum, IVV ETF is one of the cheapest ways to own global growth.

Your income stream

Where IVV builds wealth, the Betashares Australian Dividend Harvester Fund (ASX: HVST) pays the bills. 

The fund is specifically designed to provide high levels of dividend income to ASX investors. 

This ETF targets high dividend-yielding global equities, with distributions that have historically run above 7% per annum. 

That's meaningful passive income you can use to supplement your superannuation pension payments – without selling down assets during volatile markets.

The superannuation complement

Australian retirees already have a built-in foundation of diversification through their super fund, which typically holds Australian equities, bonds, property, and infrastructure. 

This means your outside-super portfolio doesn't need to replicate that complexity. 

IVV ETF adds international growth exposure that your super may underweight, while HVST ETF provides an income buffer during drawdown years.

The post The perfect ASX ETF retirement portfolio alongside your super appeared first on The Motley Fool Australia.

Here are my four top monthly-paying ASX shares. One of them yields as high as 9.7%.

Plato Income Maximiser Ltd (ASX: PL8)

Plato is a listed investment company (LIC) that targets income-focused investors, including retirees and SMSF investors. It actively manages a portfolio of mature ASX-listed equities, cash, and listed futures but focuses its attention on major ASX dividend shares with strong dividend payouts.

Plato is long-standing too. It was the first Australian LIC to target monthly dividends to its shareholders, which it has paid consistently since 2017. Since April 2022, it has paid consistent fully-franked dividends of 0.55 cents per share every month. That comes to an annual running total of 6.6 cents per share in fully-franked passive income, which translates to a dividend yield of around 4.8% at the time of writing.

Betashares Dividend Harvester Active ETF (ASX: HVST)

Betashares HVST ETF invests in 40 to 60 dividend-paying companies selected from the top 100 largest shares listed on the ASX. It selects these companies based on their dividend forecasts, franking credits, and expected future gross dividend payments.

As of the 29th of May, the HVST ETF pays a 12-month gross distribution (dividend) yield of 7.4%, and a net yield of 5.8%. Its franking level is 63.2%, and it has an annual management fee of 0.72%. HVST ETF has paid around $0.06 per share since January 2024, and is due to pay its shareholders $0.06 cents per share to investors next week. 

BetaShares Australian Top 20 Equity Yield Maximiser Fund (ASX: YMAX)

The Betashares YMAX ETF is an ASX-listed exchange-traded fund (ETF) that gives its shareholders exposure to the 20 largest blue-chip shares listed on the ASX. The fund is heavily weighted into the financial sector, which accounts for 57% of its allocation at the time of writing. The materials sector is second, accounting for 25% of its allocation.

The fund moved to monthly payouts earlier this year after previously paying shareholders a quarterly dividend. As of the 29th of May, YMAX ETF has a 12-month gross distribution yield of 9.7%, and a net yield of 8.2%. The total franking level of 41.3%.

The fund is due to pay its shareholders a $0.04 per share dividend next week. It also paid $0.04 per share in May and April.

Metrics Master Income Trust (ASX: MXT)

The Metrics Master Income Trust is a listed investment trust (LIT), which holds a portfolio of corporate loans and private credit investments rather than a portfolio of other ASX dividend shares, an area currently dominated by regulated banks. Metrics Master Income Trust targets a return of the Reserve Bank cash rate plus 3.25% p.a. (net of fees) through every stage of the economic cycle.

Its latest payout was 1.37 cents per share unfranked in April, payable next week. That means that over the past 12 months, Metrics Master Income Trust has paid out 12 dividends totalling around 16 cents per share. At the time of writing, this gives the LIT a dividend yield of around 8.3%.

The post 4 ASX shares that pay a monthly dividend to shareholders appeared first on The Motley Fool Australia.