ASX investors who are used to owning exchange-traded funds that track Australian shares are probably used to receiving a stream of dividend income as a byproduct.
Most ASX ETFs, including the popular market-wide index funds like the Vanguard Australian Shares Index ETF, routinely offer dividend yields between 3% and 5%.
It is estimated that owners of this ASX ETF will receive a quarterly dividend distribution of 17.35 cents per unit next month.
Together with July's payout of 23.3 cents, April's 13.95 cents, and January's 20.14 cents, IVV units are set to sport an annual dividend distribution total of 74.74 cents per unit.
The BetaShares Nasdaq 100 ETF is more impressive with a current trailing yield of 1.43%.
Unless you are looking at a US-based ETF that specifically targets delivering high levels of dividend income, chances are you won't be able to secure an investment with a dividend yield above 2% in current circumstances.
Well, the answer is a complex one.
The US markets are structured in a different manner from the ASX. As ASX index funds must hold more of these stocks than any other, they inherit this high-yield nature.
In contrast, the US markets are spearheaded by tech giants, companies like Apple, Alphabet, NVIDIA, and Microsoft. Whilst profitable, these companies tend to retain most of their earnings for reinvestment, rather than passing them onto shareholders as dividends.