The average dividend yield of the S&P/ASX 200 Index (ASX: XJO) is 4.2%, or 6% gross with 100% franking.
That compares to a risk-free return rate of 5.5% on plain old savings accounts these days.
Some investors may feel the risk-reward of ASX dividend shares and ETFs is less than compelling right now.
However, some ASX ETFs can deliver higher than average dividends if their strategies work out.
One ETF that aims to maximise income is the Australian Top 20 Equities Yield Maximiser Complex ETF (ASX: YMAX).
At the time of writing, YMAX ETF is trading on a trailing 12-month gross distribution yield of 10.5%.
What this ASX dividend ETF does differently
The first part of this Betashares ETF's strategy is obvious: it invests in the top 20 stocks, which all pay reliable dividends.
The top holdings are BHP Group Ltd (ASX: BHP) (18.6%), Commonwealth Bank of Australia (ASX: CBA) (14.8%), National Australia Bank Ltd (ASX: NAB) (7.1%), Westpac Banking Corp (ASX: WBC) (6.9%), and ANZ Group Holdings Ltd (ASX: ANZ) (6.7%) shares.
In addition, YMAX ETF also sells covered call options on its shares to generate extra income from the option premiums.
How it works is that YMAX sells options to investors, and each option has a strike price.
If a share's value rises above the strike price, the option owner has the right to buy the shares from YMAX at that price.
They can then sell the shares and make a profit on the difference between the strike price and current market value.
If the share does not go above the strike price, the option holder is unlikely to exercise the option.
YMAX simply keeps the premium, and no trade occurs.
The income from the options premiums provides a partial hedge against share price falls. This protects YMAX investors in falling markets.
In the calendar year to date, the ASX 200 has fallen 0.2%.
Fundie explains why 'we're not fans'
The YMAX ETF is currently $7.27 per unit, up 1% on Friday.
The Market Matters team is neutral towards the YMAX ETF around the $7 mark.
In a recent newsletter, James Gerrish from Market Matters said:
We aren't fans of the YMAX, its performance has been lacking in our opinion, just when it should have shined.
The fundie explained:
The YMAX has struggled in 2026 relative to its peers, gaining just +3.1% year-to-date.
Given its income-focused strategy and the current choppy market environment, we would have expected more from the fund, particularly compared to its peers.
YMAX ETF's management fee and expenses are 0.64%.
The post Do you own this ASX dividend ETF? Fundie explains why 'we aren't fans' appeared first on The Motley Fool Australia.
Motley Fool contributor Bronwyn Allen 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 recommended BHP Group. 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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