-+ 0.00%
-+ 0.00%
-+ 0.00%

What is the best high yield ASX ETF?

The Motley Fool·08/19/2025 23:25:06
Listen to the news

ASX ETFs give investors diversification in just one trade. Some funds are designed to track the performance of a specific sector, theme or index. 

This can range from international indexes like the S&P 500 Index (SP: .INX), to niche themes like ESG or Artificial Intelligence. 

However, some funds are designed to bring investors market beating dividend yields. 

Investors may choose these funds to focus on generating passive income rather than capital gain. 

So, let's compare three that share this objective. 

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

This is one of the newest ASX ETFs on the market, listing less than one month ago, and looking at the basics, it is made up of 50 holdings, with a management fee of 0.25% p.a. 

According to Betashares, the theory behind the fund is to improve on traditional high-dividend strategies by aiming to screen out potential 'dividend traps' such as companies projected to pay unsustainably high dividend yields, as well as companies that exhibit high levels of volatility relative to their forecast dividend payout.

Its four largest holdings by percentage are: 

According to the fund it currently trades with a 12-month trailing dividend yield of 4.5% and this is paid to investors monthly.

Therefore, after fees, a $10,000 investment generates approximately $425 in yearly passive income.

Vanguard Australian Shares High Yield ETF (ASX: VHY)

This ASX ETF is made up of 75 holdings and it comes with a management fee of 0.25% p.a. 

The index has risen approximately 46% over the past five years, bringing solid growth alongside consistent yields. 

The theory behind this fund is to invest in ASX stocks that have higher forecast dividends relative to other ASX-listed companies and security diversification is achieved by restricting the proportion invested in any one industry to 40% of the total ETF and 10% for any one company.

Additionally, Australian Real Estate Investment Trusts (A-REITS) are excluded from the index.

Its largest holdings by weight are: 

  • BHP Group Ltd (ASX: BHP) 9.8%
  • Commonwealth Bank of Australia (ASX: CBA) 9.6%
  • National Australia Bank Ltd (ASX: NAB) 6.7% 
  • Westpac Banking Corp (ASX: WBC) 6.5%

Its current equity yield is 4.7%, paid quarterly. Therefore, an investor would be paid approximately $445 per year from a $10,000 investment after fees. 

Russell Investments High Dividend Australian Shares ETF (ASX: RDV)

This fund is made up of 50 holdings. Additionally, it has a management cost of 0.34% p.a.

The theory behind this fund is choosing Australian blue-chip companies with a bias towards those that have a high expected dividend yield but also meet other characteristics including: a history of paying dividends; dividend growth and consistent earnings.

Notably, it has risen 46.23% in the last 5 years. 

Its four largest holdings by percentage are: 

Based on an announcement in June, it has a yield (with franking) of 4.05% p.a.

Therefore, a hypothetical $10,000 investment in RDV would receive about $371 per year on a grossed-up basis after fees. 

The post What is the best high yield ASX ETF? appeared first on The Motley Fool Australia.

Motley Fool contributor Aaron Bell has positions in BHP Group and National Australia Bank. 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 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.

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