Top ASX ETFs for passive income in FY26

With the new financial year about to kick off, income-focused investors are once again casting their eyes over the ASX for consistent, reliable returns.

While individual dividend shares often get the limelight, exchange-traded funds (ETFs) can be an excellent way to generate passive income while spreading risk across multiple holdings.

With that in mind, if you're looking to give your portfolio an income boost in FY 2026, here are three ASX ETFs that could be worth a closer look.

Vanguard Australian Shares High Yield ETF (ASX: VHY)

The first ASX ETF for income investors to look at is the Vanguard Australian Shares High Yield ETF. It gives investors exposure to a diversified portfolio of ASX shares that have higher than average forecast dividend yields.

But rather than just loading up on miners and banks, which traditionally pay the biggest dividends, the fund limits the proportion invested in any one industry to 40% of the total ETF and 10% for any one company. This ensures that investors are left with a diverse portfolio of dividend shares.

Key holdings include names such as BHP Group Ltd (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA), and Telstra Group Ltd (ASX: TLS). These companies are known for generating solid earnings and rewarding shareholders generously.

At present, the Vanguard Australian Shares High Yield ETF is trading with a 4.8% dividend yield.

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

For income investors wanting to diversify their income streams beyond the Australian share market, the BetaShares S&P 500 Yield Maximiser ETF could be worth considering.

This fund has been designed to generate as much income as possible from the top 500 companies listed on Wall Street through a covered call strategy.

This means the ASX ETF is able to provide investors with significantly better dividend yields than you would get by just investing in the 500 companies individually. For example, at present, the ETF offers a 12-month trailing distribution yield of 5.2%.

Its holdings include giants such as Apple (NASDAQ: AAPL), Bank of America (NYSE: BAC), Microsoft (NASDAQ: MSFT), and Walmart (NYSE: WMT).

Betashares Australian Cash Plus Fund (ASX: MMKT)

Finally, the Betashares Australian Cash Plus Fund could be one for passive income investors to look at.

The team at Betashares thinks that this ASX ETF could be a top pick for investors that are seeking an enhanced yield from their core cash allocation. Especially at a time when interest rates are falling.

The fund manager recently highlighted that "MMKT provides monthly income to investors by offering diversified exposure to not only Australian bank deposits, but also a range of more sophisticated money market securities usually only available to institutional investors."

The fund currently trades with a trailing dividend yield of 4.7%.

The post Top ASX ETFs for passive income in FY26 appeared first on The Motley Fool Australia.

Bank of America is an advertising partner of Motley Fool Money. Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Apple, Bank of America, Microsoft, and Walmart. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has positions in and has recommended BetaShares S&P 500 Yield Maximiser Fund and Telstra Group. The Motley Fool Australia has recommended Apple, BHP Group, Microsoft, 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.

The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2025