For many investors, the dream is simple: build a portfolio that pays you reliable income without having to sell down shares.
That's where income-focused exchange-traded funds (ETFs) can shine.
By pooling together dozens or even hundreds of dividend-paying shares, they give investors instant diversification and consistent distributions.
If you're looking to grow a portfolio designed for a lifetime of passive income, the two ASX ETFs named below could be worth considering.
Betashares S&P Global High Dividend Aristocrats ETF (ASX: INCM)
For investors wanting to look beyond Australian shares, the new Betashares S&P Global High Dividend Aristocrats ETF could be a great pick.
This ASX ETF invests in stocks across developed markets that have increased or maintained their dividends for at least 10 consecutive years — a group often referred to as dividend aristocrats.
The ETF's top holdings include global giants like Microsoft (NASDAQ: MSFT), Apple (NASDAQ: AAPL), Broadcom (NASDAQ: AVGO), Verizon Communications (NYSE: VZ), and Nestle (SWX: NESN). With around 100–200 stocks in the portfolio, it delivers strong diversification across sectors and geographies.
The Betashares S&P Global High Dividend Aristocrats ETF currently trades on a trailing dividend yield of 2.8%, with income paid quarterly.
While that is lower than the Australian share market's average yield, the focus here is on consistency and global diversification. The fund's index has historically provided lower volatility and downside protection compared to the broader global market — qualities many retirees and income-focused investors are likely to value highly. Betashares recently named it as one to consider.
Vanguard Australian Shares High Yield ETF (ASX: VHY)
Closer to home, the Vanguard Australian Shares High Yield ETF is one of the most popular income-focused funds on the ASX. It invests in large, established Australian shares with above-average dividend yields, many of which also offer the benefit of franking credits.
Currently, the ASX ETF trades with a trailing dividend yield of 4.6%, paid quarterly. That means a $50,000 investment could potentially generate around $2,300 a year in income — before franking credits.
The fund holds ASX shares across the financial, resources, and consumer sectors, meaning investors aren't reliant on just one industry to provide their passive income. This includes the likes of Commonwealth Bank of Australia (ASX: CBA), BHP Group Ltd (ASX: BHP), Telstra Group Ltd (ASX: TLS), and Woodside Energy Group Ltd (ASX: WDS).
Another strength of the Vanguard Australian Shares High Yield ETF is its disciplined, rules-based approach to selecting high-yielding shares. By avoiding the temptation to chase unsustainably high dividends, the fund seeks to deliver income that investors can rely on year after year, while also capturing the long-term capital growth of Australia's leading businesses.
The post 2 of the best ASX ETFs to buy for a lifetime of passive income appeared first on The Motley Fool Australia.
Motley Fool contributor James Mickleboro has positions in Woodside Energy Group. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Apple and Microsoft. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended Broadcom, Nestlé, and Verizon Communications and 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 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