3 ASX ETFs to fund a comfortable retirement
If you are looking for ETFs that are best suited for retirement, here are three ASX ETFs that stand out due to their combination of passive income, stability and long-term growth potential.
Vanguard Australian Shares High Yield ETF (ASX: VHY)
is one of the best ASX ETFs for retirement because it will give exposure to Australian companies that pay high dividend yields.
The ETF follows the FTSE Australia High Dividend Yield Index and selects ASX listed companies with higher expected dividends but does not include REITs which helps to improve the quality of yield.
Around 80 companies are included in the portfolio across sectors such as financials, materials and energy which provides diversification.
A management fee of 0.25% per year is charged by the fund which makes it a cost-efficient choice for long-term investors.
Distributions are paid on quarterly basis and the ETF aims to provide steady income along with diversified exposure to high yielding Australian equities which makes it suitable for retirement portfolios.
The iShares Core Composite Bond ETF (ASX: IAF)
is seen as one of the best ASX ETFs for retirement because it adds stability and helps reduce overall portfolio volatility through exposure to high quality bonds.
It provides exposure to a wide mix of government, semi-government and corporate bonds which together form a diversified fixed income portfolio across Australia.
A portfolio of about 723 bonds is held by the fund which improves diversification and lowers risk compared to investing in single bonds.
The management fee is low at 0.10% per year which makes it a cost-efficient choice for investors who want defensive assets and steady passive income in their portfolio.
iShares S&P 500 ETF (ASX: IVV)
is among the best ASX ETFs for retirement because it gives exposure to long-term growth from the largest companies in the United States.
The ETF tracks the S&P 500 Index and invests in 500 large cap US companies across sectors such as technology, healthcare and financials which form a major part of the global economy.
A management fee of only 0.04% per year makes the fund one of the lowest cost options to access global equities.
Quarterly distributions are paid but the ETF focuses more on capital growth instead of passive income.
Companies within the S&P 500 have historically achieved very high returns on capital because of strong competitive advantages, global scale and high profitability which will support long-term compounding.
(Source: Company Reports)
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