In today's world, generating passive income has become an increasingly popular goal for investors. One of the simplest ways to achieve this is by investing in high-yielding dividend stocks. However, managing a diversified portfolio of these stocks can be time-consuming. That's where exchange-traded funds (ETFs) come in, offering investors a convenient way to collect passive income. Two such ETFs that stand out are the Schwab U.S. Dividend Equity ETF and the Vanguard Real Estate ETF.

The Schwab U.S. Dividend Equity ETF (SCHD 1.84%) and the Vanguard Real Estate ETF (VNQ 1.87%) offer investors easy access to a collection of higher-yielding dividend-paying stocks. These ETFs encompass over 100 stocks each, ensuring instant diversification and reducing risk.

The Schwab U.S. Dividend Equity ETF tracks the total return of the Dow Jones U.S. Dividend 100 Index, which includes 100 top dividend stocks. These companies are carefully chosen based on their financial strength compared to their peers. Notable holdings in the ETF include Verizon, yielding nearly 7%, and Pfizer, yielding around 6%. Both companies have a solid track record of consistently increasing their dividends.

With a current distribution yield of over 3.3%, the Schwab U.S. Dividend Equity ETF offers a higher dividend yield than the S&P 500. Additionally, it boasts a low expense ratio of 0.06%, allowing investors to retain a larger portion of the dividend income generated by its holdings.

On the other hand, the Vanguard Real Estate ETF focuses exclusively on real estate investment trusts (REITs). REITs own income-producing properties and generally distribute a significant portion of their income in dividends. This ETF holds over 150 REITs, offering investors diversified exposure to the real estate sector.

Several prominent holdings of the Vanguard Real Estate ETF include Prologis, a leading industrial REIT yielding nearly 4% and growing its dividend at a compound annual rate of 13% over the past five years. American Tower, a data infrastructure REIT, yields around 3.5% and has increased its payout by almost 19% annually over the past decade. Realty Income, a diversified REIT, boasts a dividend yield of over 6% and has consistently grown its dividend for more than 25 years.

With a yield of approximately 4% and an expense ratio of 0.13%, the Vanguard Real Estate ETF provides investors with broad exposure to high-yielding REITs at a reasonable cost. As REITs often increase their dividends over time, this ETF can offer investors a steadily rising passive income stream.

Both the Schwab U.S. Dividend Equity ETF and the Vanguard Real Estate ETF offer investors an easy and convenient way to start generating passive income. By investing in these ETFs, individuals can sit back and watch their income flow steadily into their accounts.