Passive income made simple: 3 ASX ETFs that pay you to hold them

For many investors, the dream is simple: earn consistent income without having to constantly monitor the market.

One way you could achieve this is with the exchange-traded funds (ETFs) listed below.

With a diversified mix of holdings and regular distributions, these funds are designed to pay you simply for owning them.

Let's find out more about them now.

Vanguard Australian Shares High Yield ETF (ASX: VHY)

If you're looking for dependable income from some of Australia's largest dividend payers, the Vanguard Australian Shares High Yield ETF is one to consider. This ASX ETF targets ASX shares that have a track record of delivering higher-than-average dividend yields — making it a go-to option for income-focused investors.

It holds a concentrated portfolio of shares like BHP Group Ltd (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA), and Westpac Banking Corp (ASX: WBC), However, it does this with diversification in mind. No one holding will ever amount for more than 10% of the portfolio.

For anyone looking to tap into the income power of the ASX, this ETF offers both simplicity and reliability. At present, it trades with a dividend yield of approximately 4.8%.

Betashares Australian Cash Plus ETF (ASX: MMKT)

The Betashares Australian Cash Plus ETF is an ultra-low-volatility cash ETF that gives investors exposure to high-quality Australian cash deposits and short-term money market instruments.

This fund has become an appealing place to park idle funds and generate consistent income. While it won't shoot the lights out in terms of capital growth, the yield (currently 4.7%) offers attractive risk-adjusted returns — particularly when compared to many bank savings accounts.

The Betashares Australian Cash Plus ETF can be especially useful for conservative investors, or as a cash anchor within a diversified portfolio. It was named as one to buy by Betashares to combat falling interest rates.

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

Finally, the BetaShares S&P 500 Yield Maximiser Fund generates income using a clever covered call strategy over the 500 largest stocks on Wall Street.

This type of options overlay earns premiums by selling calls over the index. The result is regular income distributions that can be significantly higher than the standard dividend yield of the S&P 500 index — albeit with slightly reduced upside in bull markets due to the nature of its strategy. It currently trades with a 5.1% dividend yield.

For Aussie passive income investors seeking global exposure, this ETF could be a compelling addition.

The post Passive income made simple: 3 ASX ETFs that pay you to hold them appeared first on The Motley Fool Australia.

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 no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended BetaShares S&P 500 Yield Maximiser Fund. 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.

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