Are these the best high dividend ETFs in Australia?

Discover these Australian high dividend ETFs

Stock price and year to date returns to 10 August 2023, expense ratio and historical dividend yield data as of 30 June 2023. Source: ASX and ASX Investment Products - June 2023.

 *The list of funds mentioned is ranked by historical dividend yield. The ETFs shown here are selected because of their dividend yield as seen in the ASX Investment Product report.

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Australian high dividend ETFs returns

Data as of 30 June 2023. Source: ASX and ASX Investment Products - June 2023.

Discover which are the best high dividend ETFs for your portfolio

1. Intelligent Investor Australian Equity Income Fund (Managed Fund) ($INIF)

Historical dividend yield: 8.71%

ETF price (as of 10/08/2023): $2.71

Stake Platform Bought / Sold (1 Jan 2023 - 10 Aug 2023): 51% / 49%

The Australian Equity Income Fund is an actively managed product with a portfolio that holds 10 to 35 Australian stocks. They target large, established and small firms believed to have competitive advantages in the segment that help them generate income and pay dividends to shareholders. It has an expense ratio of 0.97%, but no performance fee. The performance is measured against the S&P ASX 200 index, but the investment strategy of this dividend ETF product might result in different overall returns.

2. BetaShares Australia Top20 Equity Yield Maximiser Fund (Managed Fund) ($YMAX)

Historical dividend yield: 8.71%

ETF price (as of 10/08/2023): $7.53

Stake Platform Bought / Sold (1 Jan 2023 - 10 Aug 2023): 76% / 24%

The YMAX holdings include the 20 largest stocks on the ASX by market cap. The dividend ETF product doesn’t track an underlying index and is passively managed. It aims to provide investors with steady income through dividend distributions and offset market downturns with these high yields. Considering commonly featured ASX blue chip shares, this dividend ETF has exposure to bank stocks, mining shares and other well-known Australian firms.

3. SPDR S&P/ASX 200 Resources Fund ($OZR)

Historical dividend yield: 8.04%

ETF price (as of 10/08/2023): $13.73

Stake Platform Bought / Sold (1 Jan 2023 - 10 Aug 2023): 79% / 21%

This OZR ETF tracks the S&P/ASX 200 Resources Index, providing exposure to businesses in the metals, mining and energy sectors. The ETF does not explicitly focus on dividend yields, but rather on the companies that fall into these industries. As the prices of raw materials often change, these trends could affect dividend growth for this exchange-traded fund. As of 9 August 2023, it had 46 holdings and high exposure to BHP ($BHP) due to its large market cap.

4. Global X Ultra Long Nasdaq 100 Hedge Fund ($LNAS)

Historical dividend yield: 7.89%

ETF price (as of 10/08/2023): $7.85

Stake Platform Bought / Sold (1 Jan 2023 - 10 Aug 2023): 52% / 48%

The managed fund product provides exposure to the Nasdaq index for the 100 largest non-financial companies listed in the U.S. It’s designed to provide positively ‘geared’ returns, which amplify the performance of the index by around 200% to 275%. As a leveraged financial product that uses future contracts as part of its investment strategy, it has higher risk than a general dividend equity ETF that tracks an index.

5. Global X S&P 500 High Yield Low Volatility ETF ($ZYUS)

Historical dividend yield: 7.74%

ETF price (as of 10/08/2023): $13.15

Stake Platform Bought / Sold (1 Jan 2023 - 10 Aug 2023): 73% / 27%

This dividend ETF invests in 50 large companies listed in the U.S. with high yields and the ETF pays investors regular income each quarter. It uses the S&P 500 Low Volatility High Dividend Index as a benchmark for performance. The holdings in the dividend ETF are rebalanced every six months, with the stocks first being screened to find the 75 highest yielding and then cut down to the 50 least volatile shares from the S&P 500.

6. Global X S&P/ASX 300 High Yield Plus ETF ($ZYAU)

Historical dividend yield: 7.53%

ETF price (as of 10/08/2023): $8.36

Stake Platform Bought / Sold (1 Jan 2023 - 10 Aug 2023):  82% / 18%

This is another one of the Australian dividend ETFs and tracks the S&P/ASX 200 High Dividend Index. Its holdings consist of 50 stocks with high dividend yields based on consensus 12-month forecasts from the main ASX / S&P 200 index, often being large caps in the financial, energy and materials sectors. These exclude real estate investment trusts (REITs) and shares ranked in the lowest 10% by momentum value. The expense ratio of 0.24% is one of the lowest among dividend-focused ETFs.

7. SPDR S&P/ASX 200 Listed Property Fund ($SLF)

Historical dividend yield: 7.43%

ETF price (as of 10/08/2023): $10.58

Stake Platform Bought / Sold (1 Jan 2023 - 10 Aug 2023): 23% / 77% 

This dividend-paying ETF is focused on the listed property sector. It tracks the performance of Australian REITs and mortgage REITs that are part of the ASX/S&P 200, rather than specifically screening stocks for high yields. A proportion of the regular income from rental payments on various industrial, retail, office, storage and residential properties is passed onto investors as dividends. An ETF focused on a single sector can be more risky than one tracking a general index due to the lack of diversification. 

8. Platinum International Fund (Quoted Managed Hedge Fund) ($PIXX)

Historical dividend yield: 6.94%

ETF price (as of 10/08/2023): $4.78

Stake Platform Bought / Sold (1 Jan 2023 - 10 Aug 2023): 69% / 31%

This product provides access to a managed global fund that invests across industries. The Platinum Asset Management team aims to select between 70 and 140 stocks, which they believe are undervalued by the market, rather than strictly focusing on dividends. Like many actively managed products, the expense ratio of 10% is on the higher side. The team also received a 15% bonus fee if they outperform the benchmark MSCI AC World Net Index.

9. BetaShares Australian Dividend Harvester Fund (Managed Fund) ($HVST)

Historical dividend yield: 6.88%

ETF price (as of 10/08/2023): $12.40

Stake Platform Bought / Sold (1 Jan 2023 - 10 Aug 2023): 56% / 44%

The managed fund product aims to generate income from franked dividends that exceed the amount from the general Australian share market on a yearly basis. Their portfolio usually has between 40 and 60 stocks from the largest 100 by market cap and is adjusted every three months to provide high dividend yields. The product targets those for whom income is a priority, with investors benefiting from monthly distributions.

10. VanEck Morningstar Wide Moat ETF ($MOAT)

Historical dividend yield: 6.76%

ETF price (as of 10/08/2023): $116.10

Stake Platform Bought / Sold (1 Jan 2023 - 10 Aug 2023): 62% / 38%

This ETF tracks the performance of the Morningstar Wide Moat Focus Index, which is a rules-based index designed by the firm. It has at least 40 U.S. stocks that are considered to be well-priced and have sustainable competitive advantages. It tends to favour large firms, with the top sectors being technology, healthcare and financials. Historically, this high dividend ETF has also had high overall returns, but it’s still no guarantee of its future performance.

How to choose the right high dividend yield ETF

There are several factors to consider before making an investment decision and not every dividend ETF will match your strategy or be a suitable long-term investing choice. Prioritising dividend growth might affect other aspects of an ETFs performance and it could be useful to also look at these additional metrics. 

• Total return shows the change in the ETF's price and income generated after fees. 
• Trailing or dividend yield is calculated by dividing the current share price by the sum of all dividends paid out in the previous twelve months. It’s taken as a rough guide to potential future returns and used to forecast future dividends by some.
• Funds or assets under management is the amount of money invested in the ETF product. Those with larger amounts tend to have higher liquidity and issuers might find that offering those very low sums might become financially viable in the long run.
• The expense ratio is expressed as a percentage that’s taken out of the ETF’s price to cover the costs of the firm responsible for the product. Actively managed ETF products usually have higher ratios and might have additional performance fees.
• ETF products often track a specific stock market index and the tracking error shows the difference between the ETF and index’s performance. Smaller figures usually indicate that the issuer is able to replicate the index closely. Actively managed products don’t usually follow an index but might use one as a benchmark for performance and often have greater variance in returns.

Are high dividend ETFs worth investing in?

High dividend ETFs can be useful for investors looking to receive regular income from their portfolio. However, distributions from high ETF dividends are not guaranteed and ultimately depend on the performance of their holdings. Many actively managed products or those with a strategy focused on dividends do have higher expense ratios than general index funds.

Investors need to weigh up whether these potential income returns could offset these costs. Critics argue that if firms pay out high levels of dividends to investors, there are fewer funds left to put back into and grow the business over time, especially in areas such as research and development.

Dividend ETFs should be seen as part of a portfolio, with exposure to specific regions and industries. Those wanting to strictly avoid some investments, such as fossil fuels, might consider options that screen for other matters, like ethical ETFs.

Can you reinvest dividends in an exchange-traded fund?

ETFs do offer dividend reinvestment plans (DRPs). DRPs allow investors to automatically reinvest cash distributions into additional units of the ETF. They don’t need to worry about making or paying the transaction costs of these trades, it’s kind of like completing dollar cost averaging actions for them. The setup and how to participate depends on the specific product.

More resources:

✅ Dividend investing: How to buy dividend stocks→

✅ 10 High dividend U.S. stocks to watch→

✅ U.S. stocks that pay monthly dividends→

✅ Are these the best dividend stocks on the ASX?→

This does not constitute financial product advice nor a recommendation to invest in the securities listed. Past performance is not a reliable indicator of future performance. As always, do your own research and consider seeking appropriate financial or taxation advice before investing.