iShares ASX Dividend Opportunities ESG Screened ETF (IHD) $16.88

The iShares ASX Dividend Opportunities ESG Screened ETF is a local income fund with a conscience,  it targets high-yielding Australian shares while applying an environmental, social and governance (ESG) screen to filter out companies that don’t meet certain ethical standards. Managed by BlackRock, one of the world’s largest asset managers, IHD tracks the S&P/ASX Dividend Opportunities Index and typically holds around 50 of the highest-yielding ASX-listed stocks, such as banks, infrastructure companies, and selected resources names that pass the ESG filter. The yield is one of IHD’s main drawcards; it’s forecast to deliver 4.5% over the coming 12-months, and like the VHY, Australian investors can benefit from franking credits on top of that headline number, which can meaningfully boost the after-tax return for eligible investors.

The annual fee sits at around 0.30%, making it slightly more expensive than VHY but still very competitive for a screened income strategy. For Australian investors who want strong dividend income but are uncomfortable holding certain industries,— weapons manufacturers, thermal coal producers, or tobacco companies, for example, IHD offers a way to capture yield without the ethical compromise. It’s ASX-listed, priced in Australian dollars. The key risk, as with VHY, is concentration in Australian banks and financials.

• We like the IHD ETF and can see new highs through 2026, but in the short term, further weakness towards $16 wouldn’t surprise but note this could unfold in May when 3 of the Big Four Banks trade ex-dividend.