ASX dividend shares have an income competitor for the first time in years.

The Reserve Bank left the cash rate unchanged at 4.35% at its June meeting, following three increases since the start of the year.

That has pushed term deposit rates to levels Australian savers have not seen for some time.

Commonwealth Bank of Australia (ASX: CBA) is currently advertising a 12-month term deposit special of 5.25% per annum, with a standard 12-month rate of 4.75%.

Both are guaranteed, and deposits are protected up to $250,000 per person per institution.

So the following question is a fair one: Why own bank shares when the bank itself will pay you more for a term deposit?

The case against ASX dividend shares right now

On headline yield alone, cash wins comfortably.

Analysts expect CBA to pay a total dividend of $5.15 per share in FY26, which is equivalent to a forward yield of around 3% at the current share price.

FY27 forecasts of $5.45 per share imply about 3.2%.

A 5.25% term deposit beats both, with none of the volatility.

Term deposits also beat annual inflation, which the RBA recorded at 4.0% for the year to May.

Franking credits change the maths

The comparison is not quite complete, though.

CBA’s dividends are fully franked, which means the company has already paid 30% tax on the profits behind them.

Grossing up a 3% cash yield produces an effective pre-tax yield of roughly 4.3%.

On the FY27 forecast, that rises to about 4.6%.

For an investor in a low- or zero-tax environment, such as a pension-phase superannuation fund, those credits are refundable in full.

However, a term deposit pays the same rate for the whole term and then rolls over to whatever rates exist at the time (reinvestment risk), which is a real risk if the RBA does begin cutting in 2027.

CBA, by contrast, has delivered a rising dividend every year since 2021, meaning your yield on cost can grow over time, which a term deposit cannot do.

CBA’s most recent earnings

So what has been driving these dividend increases? To answer this question, it is worthwhile to look at the results.

CBA delivered cash net profit of $5,445 million in its FY26 half-year result, up 6% on the prior period.

The company lifted its interim dividend 4% to $2.35 per share, fully franked.

In contrast, the March quarter update was steadier. Cash net profit came in at around $2.7 billion, up 4% year on year but down 1% on the first-half quarterly average. Business lending grew 12.5%, household deposits rose 9.1%, and home lending increased 7.1%.

A $316 million loan impairment expense reflected what the bank described as heightened geopolitical and macroeconomic uncertainty.

Full-year results for CBA are due on 12 August.

Foolish takeaway: ASX dividend shares versus cash

If you need a known sum on a known date, the term deposit is the better instrument today.

But ASX dividend shares are not really competing on this year’s yield.

They are competing on the next decade of dividend growth, franking credits and capital appreciation, all of which come with the very real risk of losing money along the way.

The choice investors make should be aligned with their risk appetite.

The post Term deposits at 4.35% vs. ASX dividend shares: which one wins? appeared first on The Motley Fool Australia.

More reading

• The bring-forward rule just got bigger. Here’s what that means for your superannuation
• How much could a $100,000 ASX share portfolio pay in dividends?
• $10,000 invested in CBA shares 6 months ago is now worth…
• This UK bank plans to disrupt CBA, ANZ, NAB and Westpac
• 3 reasons CBA shares are a screaming buy right now

Motley Fool contributor Mark Verhoeven has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Not every ASX exchange traded fund (ETF) needs to chase the hottest theme in the market.

Sometimes the better move is to own funds that can make a portfolio stronger, broader, and less dependent on one narrow idea.

With that in mind, here are three ASX ETFs that could be worth considering in FY 2027.

Vanguard MSCI Index International Shares ETF (ASX: VGS)

The Vanguard MSCI Index International Shares ETF could be a strong foundation holding.

It gives investors exposure to more than 1,000 stocks across developed markets outside Australia.

That means a portfolio can look beyond the usual local mix of banks, miners, supermarkets, and property groups.

This fund owns international businesses across sectors such as technology, healthcare, industrials, consumer goods, financials, and communications.

The big advantage is that investors do not need to know which country, sector, or company will lead the next decade. They can own a broad slice of the developed world through one ASX trade, which is never a bad thing.

Betashares Australian Quality ETF (ASX: AQLT)

The Betashares Australian Quality ETF takes a more selective approach to the local share market.

Rather than buying Australian shares simply because they are large, this fund focuses on companies with quality characteristics.

That can include stronger profitability, lower debt, and more stable earnings.

This can be an attractive way to invest locally because the Australian share market can be heavily influenced by banks and resources companies. A quality filter gives investors a different way to sort through the ASX.

The fund still provides Australian exposure, but it does so with more discipline than a plain market-cap index.

That could make it interesting for investors who like the idea of owning local shares, but want a portfolio tilted toward stronger businesses. It was recently recommended by analysts at Betashares.

Betashares Global Cash Flow Kings ETF (ASX: CFLO)

Finally, the Betashares Global Cash Flow Kings ETF brings a different type of discipline.

It focuses on global companies that generate high levels of free cash flow.

That is important because free cash flow is the money left over after a company has paid the bills needed to keep the business running and growing.

Businesses with strong cash generation often have more choices. They can reinvest, strengthen the balance sheet, buy back shares, pay dividends, or ride out difficult periods without as much pressure.

This fund is not trying to own the loudest growth stories. It is looking for companies with financial strength sitting behind the share price. It was also recently recommended by the team at Betashares.

The post 3 strong ASX ETFs to buy for FY27 appeared first on The Motley Fool Australia.

More reading

• Getting started with ASX ETFs? These 3 might be worth a look
• How I would turn $200,000 into an ASX retirement income portfolio
• 5 ASX ETFs for beginner investors in July
• 3 ASX ETFs that make long-term investing easy
• VAS vs VGS: Which Vanguard ETF is winning so far this year?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Vanguard Msci Index International Shares ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

It’s been another painful session for investors in WiseTech Global Ltd (ASX: WTC) shares.

The logistics software company’s shares tumbled 7% on Thursday to $31.48. That leaves the stock down almost 73% over the past year and close to $90 below its peak.

After such a dramatic collapse, investors are asking an obvious question: could WiseTech shares really recover from here?

Why the shares have crashed

The sell-off hasn’t been driven by a collapse in demand.

WiseTech’s flagship CargoWise platform remains one of the world’s leading logistics software solutions, used by freight forwarders, customs brokers, and supply chain operators globally. The business continues to benefit from the long-term shift towards digitising global trade.

Instead, governance concerns have weighed heavily on sentiment. Questions surrounding founder and executive chairman Richard White first emerged late last year and have continued to overshadow the company’s operational performance.

More recently, media reports that the Australian Federal Police is investigating White over alleged trafficking matters have added fresh uncertainty.

WiseTech responded by stating the reported investigation relates to White in his personal capacity.

Results could be a turning point

The next major catalyst arrives with WiseTech’s FY26 results next month.

Earlier this year, management reaffirmed guidance for revenue of US$1.39 billion to US$1.44 billion, representing growth of 79% to 85%.

The company also expects EBITDA of US$550 million to US$585 million, up between 44% and 53% on FY25.

If WiseTech meets or exceeds those targets, investors in WiseTech shares may start shifting their focus back to the company’s underlying growth rather than governance issues.

Brokers still see substantial upside

Despite the collapse, several brokers remain optimistic. Citi recently retained its buy rating, although it reduced its 12-month price target to $52 from $65.65. Even after the downgrade, that implies gains of more than 65% from current levels.

Bell Potter is even more bullish. The broker also has a buy rating and a $71.75 price target, implying the shares could more than double over the next 12 months.

Bell Potter believes WiseTech has largely missed the recent rally in ASX technology stocks because of company-specific headwinds. However, it expects those issues to gradually fade, beginning with the appointment of Raelene Murphy as chair.

Foolish takeaway

WiseTech’s underlying business continues to deliver strong growth, but governance concerns have dominated the investment story.

Whether the shares recover will likely depend less on revenue growth, which remains robust, and more on whether management can rebuild investor confidence.

Some brokers believe the upside could be enormous. Even so, after one of the ASX’s biggest share price collapses, investors should expect the road to recovery to remain volatile.

The post WiseTech shares have crashed 73%. Is this the buying opportunity of the decade? appeared first on The Motley Fool Australia.

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• WiseTech buys FRDM.ai. What does this mean for WiseTech shares?
• 9 ASX 200 shares with refreshed buy ratings this week
• Are Megaport and WiseTech shares top buys?
• Here’s what brokers tip for WiseTech shares over the next 12 months
• I’d listen to Warren Buffett and buy cheap ASX shares

Motley Fool contributor Marc Van Dinther has positions in WiseTech Global. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended WiseTech Global. The Motley Fool Australia has positions in and has recommended WiseTech Global. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Superannuation can be a great place to build passive income for retirement.

The tax settings can be attractive, the investment time horizon is long, and investors have the ability to reinvest returns for years before they need to draw on the money.

But how much would someone actually need in superannuation to target a $3,000 monthly passive income?

Let’s break it down.

How much is $3,000 per month?

A $3,000 monthly passive income works out to $36,000 per year.

That could make a meaningful difference in retirement. It could help cover groceries, insurance, bills, travel, healthcare, or provide extra breathing room alongside the Age Pension or other income sources.

To achieve this, the amount needed in superannuation depends on the dividend yield generated by the portfolio.

A simple way to estimate it is to divide the annual income target by the portfolio yield.

How much superannuation is needed?

If a superannuation portfolio generated a 3% yield, an investor would need around $1.2 million to earn $36,000 per year in passive income.

At a 4% yield, the required balance falls to around $900,000. A portfolio yielding 5% would need approximately $720,000, while a 6% yield would require about $600,000.

That is a wide range, but it shows how much the yield changes the equation.

A lower-yielding portfolio may require more capital, but it could offer stronger growth or lower income risk. A higher-yielding portfolio can make the income target look easier, but it may come with greater risk.

Should you aim for the highest yield?

It can be tempting to focus only on the biggest dividends.

But that can be a mistake. A very high dividend yield can sometimes be a warning sign. The market may be expecting the dividend to fall, or the company could be facing pressure from weaker earnings, debt, regulation, lower commodity prices, or a difficult cycle.

The best approach is arguably to think about income that is sustainable. That means looking for ASX shares with reliable cash flow, manageable payout ratios, robust balance sheets, and business models that can keep supporting dividends over time.

It is important to remember that a $3,000 monthly passive income target is not just about getting paid next year. It is about building an income stream that can last through retirement.

What ASX shares could help?

ASX shares can be attractive inside superannuation because many pay dividends and some offer franking credits.

Lower-yielding blue chips such as Wesfarmers Ltd (ASX: WES), Woolworths Group Ltd (ASX: WOW), and Washington H. Soul Pattinson and Co Ltd (ASX: SOL) may be good options for investors who want quality and long-term dividend growth potential.

Shares such as Telstra Group Ltd (ASX: TLS), APA Group (ASX: APA), and Transurban Group (ASX: TCL) can provide exposure to telecommunications and infrastructure-style cash flows.

Property trusts such as Charter Hall Long WALE REIT (ASX: CLW) and Charter Hall Retail REIT (ASX: CQR) can also play a role. And investors willing to accept more cyclicality might look at names such as Harvey Norman Holdings Ltd (ASX: HVN) or Universal Store Holdings Ltd (ASX: UNI), which can offer attractive fully franked dividends when trading conditions are supportive.

Foolish takeaway

Aiming for $3,000 per month in passive income from superannuation is achievable, but the required balance depends heavily on the portfolio yield.

At a 5% yield, the rough target is around $720,000. At 6%, it falls to around $600,000.

The best answer may sit somewhere between growth and income. A portfolio that combines quality dividend shares, infrastructure, property income, and some dividend growth potential could give retirees a better chance of building an income stream that lasts.

The post How much is needed in superannuation to target a $3,000 monthly passive income? appeared first on The Motley Fool Australia.

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• Buy, hold, sell: Woolworths, Elders, Wesfarmers shares
• 8 ASX 200 shares downgraded by experts this week
• How much could a $100,000 ASX share portfolio pay in dividends?
• How much does Morgan Stanley think Wesfarmers shares will fall?
• 3 shares with above-average dividend yields to supplement your superannuation

Motley Fool contributor James Mickleboro has positions in Universal Store and Woolworths Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Transurban Group, Washington H. Soul Pattinson and Company Limited, and Wesfarmers. The Motley Fool Australia has positions in and has recommended Apa Group, Charter Hall Retail REIT, Harvey Norman, Telstra Group, Transurban Group, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Universal Store and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Trying to keep up with Zip Co Ltd (ASX: ZIP) shares has become a challenge even for seasoned investors.

The buy now, pay later (BNPL) stock finished Wednesday down 5% to $2.65. That leaves the shares down around 15% over the past five trading days, 19% for the year to date, 10% over the past 12 months, and roughly 45% below their October peak.

So, what’s behind the wild swings, and what should investors be watching next?

The business is improving

Despite the volatile share price, Zip’s underlying business is arguably in the strongest position it has been in for several years.

The company is growing again, profitability is improving, analysts have become more constructive, and management continues to buy back shares under its $50 million on-market buyback program.

Just as importantly, investors are now paying closer attention to earnings rather than simply transaction growth.

That shift has worked in Zip’s favour as stronger revenue increasingly translates into higher profits.

Strong momentum continues

Zip delivered another solid operating update in the third quarter of FY26. Transaction volume rose 22.4% to $4 billion, while total income climbed 20.2% to $335.2 million.

The standout figure was cash EBITDA, which surged 41.5% to a record $65.1 million. Operating margins also expanded to 19.4%. The stronger performance prompted management to lift FY26 cash EBITDA guidance to at least $260 million.

Much of that momentum continues to come from the United States. US transaction volumes and revenue both increased more than 43% in US dollar terms during the quarter, while active customer numbers grew 9%.

Those figures suggest Zip is continuing to win new customers while existing users remain highly engaged.

One key risk remains

Not everything is moving in the right direction. Bad debts remain the biggest concern for investors. Group net bad debts increased to 1.93% of transaction volume during the third quarter, up from 1.64% a year earlier.

Encouragingly, management of Zip shares noted that US net bad debts remained stable at 1.86% and expects them to decline below 1.75% during the fourth quarter.

If that happens, it would provide further evidence that Zip can continue growing without sacrificing credit quality.

All eyes on August

The company’s next trading update on 20 August could prove pivotal.

Investors in Zip shares will be looking for continued growth in transaction volumes, another improvement in profitability, and confirmation that bad debts are moving lower.

Foolish takeaway

Zip shares remain volatile, but the company’s fundamentals are moving in the right direction.

Improving earnings, strong US growth, and ongoing share buybacks are encouraging signs.

However, with credit quality still under close scrutiny, the next earnings update could determine whether Zip’s next recovery can start, or whether the recent volatility has further to run.

The post Zip shares are going wild. What investors need to know appeared first on The Motley Fool Australia.

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• 9 ASX 200 shares with refreshed buy ratings this week
• Could US expansion send Zip shares soaring further?
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• Top brokers name 3 ASX shares to buy next week

Motley Fool contributor Marc Van Dinther has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Vanguard Australian Shares Index ETF (ASX: VAS) delivered a total gross return of 6.19% in FY26.

This was slightly higher than the total return of the index that VAS tracks, the S&P/ASX 300 Index (ASX: XKO).

The ASX 300 gained 2.84% in value and paid a 3.32% dividend yield for a total return of 6.16% in FY26.

After the teeny-tiny management fee of 0.07%, VAS ETF gave investors a 6.12% net return.

The VAS exchange-traded fund (ETF) closed out the year at $109.30 per unit on 30 June.

The ETF hit a 52-week high of $114.25 on 27 February.

With $25.377 billion in funds under management, VAS remains the largest ETF by market cap on the ASX today.

We’ve reviewed VAS ETF’s performance and identified the 10 stocks that rose the most within its basket.

Let’s check them out.

10 biggest risers within the VAS ETF in FY26

1. Sunrise Energy Metals Ltd (ASX: SRL)

This ASX 300 mining share stunned investors with a 2,040% gain in FY26 to finish the year at $17.23.

Sunrise Energy Metals is developing scandium and nickel-cobalt projects in central-west NSW.

2. 4DMedical Ltd (ASX: 4DX)

This ASX 300 healthcare share skyrocketed 1,786% to close out the year at $4.53.

The respiratory imaging technology company received US Food and Drug Administration (FDA) approval for its CT:VQ product in FY26.

CT:VQ is a post‑processing technology that transforms routine chest CTs into quantitative, lobar ventilation (V), and perfusion (Q) maps.

3. Minerals 260 Ltd (ASX: MI6)

This ASX 300 gold share soared 508% to end FY26 at 73 cents per share. 

This mineral explorer is building the Bullabulling Gold Project in Western Australia’s Eastern Goldfields.

4. Weebit Nano Ltd (ASX: WBT)

The Weebit Nano share price turbocharged itself 414% higher to $8.35 on 30 June.

Weebit develops advanced semiconductor memory technology.

5. Elevra Lithium Ltd (ASX: ELV)

This ASX 300 lithium share rocketed 327% higher to finish at $9.60 on 30 June.

Elevra was formed through the merger of Piedmont Lithium and Sayona Mining.

Its flagship mine is the North American Lithium Project.

6. Elsight Ltd (ASX: ELS) 

The Elsight share price soared 300% to finish FY26 at $7.10. 

Elsight’s Halo product provides Beyond the Visual Line of Sight (BVLOS) connectivity for drones, UAVs, and other unmanned air and land defence systems.

7. PLS Group Ltd (ASX: PLS)

Formerly known as Pilbara Minerals, this ASX 300 lithium share soared 275% to $5.02 apiece.

The company’s flagship is the Pilgangoora Operation, the world’s largest independent hard-rock lithium mine. 

Like all ASX lithium miners, PLS shares benefited from rapidly rebounding lithium commodity prices in FY26.

8. Electro Optic Systems Holdings Ltd (ASX: EOS)

The Electro Optic Systems share price increased 261% to close FY26 at $10.30.

Electro Optic specialises in defence technology, advanced weapon systems, and counter-drone solutions.

9. Macmahon Holdings Ltd (ASX: MAH) 

This ASX 300 materials share increased 213% to finish the year at 96 cents apiece.

Macmahon is a contract mining and civil infrastructure company providing operations services in Australia and Southeast Asia.

10. Mineral Resources Ltd (ASX: MIN) 

The Mineral Resources share price soared 188% to finish the year at $62.65.

The stock was in rebound mode after corporate governance issues and financial concerns dragged it down in FY25.

The post Own VAS ETF? Here’s how your investment performed in FY26 appeared first on The Motley Fool Australia.

More reading

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Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Electro Optic Systems. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Reporting season can make the share market feel unusually dramatic.

A company can announce record revenue and watch its share price fall. Another can report declining profit and still rally strongly. During these weeks, the market is not simply judging whether the numbers are good or bad. It is judging how those numbers compare with expectations.

That distinction matters. For long-term investors, reporting season should be less about reacting to the scoreboard and more about understanding how the business is progressing.

What is reporting season?

Twice a year, most ASX-listed companies provide shareholders with a detailed update on their financial performance.

Companies with a 30 June financial year typically release full-year results in August and half-year results in February. These updates commonly include financial statements, an investor presentation, management commentary, dividend information, and sometimes an earnings call with analysts. 

Together, these materials provide a snapshot of what the company earned, spent, owned, owed, and generated in cash over the reporting period.

They also give investors an opportunity to compare the latest performance with previous results, management’s earlier promises, and the assumptions underpinning their investment thesis.

Look beyond the headline profit

Revenue and net profit usually attract the biggest headlines. They matter, but neither number tells the full story.

A growing company may report higher revenue while its margins shrink because wages, materials, energy, or customer acquisition costs have risen. Another may produce impressive accounting earnings but convert relatively little of that profit into cash.

Investors might therefore consider several broader questions.

Is revenue growing organically, or has the company relied on acquisitions? Are margins expanding or contracting? Is operating cash flow keeping pace with profit? Has debt risen, and can the business comfortably service it? Is management reinvesting capital sensibly, paying dividends, or buying back shares?

It is also worth separating recurring earnings from one-off benefits. Asset sales, favourable currency movements, reserve releases, or temporary commodity price spikes can boost a single result without improving the underlying business.

The most useful measures also vary by industry.

For banks, investors may examine net interest margins, loan arrears, bad-debt provisions, and capital strength. Retailers can be assessed through comparable sales, gross margins, discounting, and inventory levels. Miners may be judged on production, realised prices, unit costs, capital expenditure, and free cash flow. Software businesses often require attention to recurring revenue, customer retention, and whether higher sales are translating into operating leverage. 

The economic clues hiding in company results

Reporting season also provides a ground-level view of the Australian economy.

This year, inflation, interest rates, and rising operating costs are likely to feature prominently. Businesses with genuine pricing power may be able to pass higher costs to customers without severely damaging demand. Others may face pressure on profit margins as households and businesses become more selective with their spending.

Banks and consumer-facing companies could offer clues about mortgage stress, loan arrears, household demand, and the health of the housing market. Resource companies remain exposed to commodity prices and geopolitical uncertainty, while technology results may reveal whether enthusiasm around artificial intelligence is translating into sustainable revenue and profits.

Expectations themselves may add to the volatility. Quantitative funds and other short-term traders can react rapidly to even small earnings surprises. That creates the potential for unusually large share price movements in either direction. 

One result is not the whole story

A reporting period covers only six or 12 months. A long-term investment thesis may span many years.

A disappointing result does not automatically mean a good business has become a poor one. Equally, one outstanding period does not guarantee that strong growth, high margins, or generous dividends will continue.

The better question is whether the latest update confirms, weakens, or changes the long-term story.

Is the company strengthening its competitive position? Is management delivering on earlier commitments? Are earnings and cash flow moving in the right direction across several reporting periods? Does the balance sheet provide room to invest through difficult conditions?

Share prices may swing sharply as investors vote on the latest numbers. Over longer periods, however, the market is more likely to weigh what ultimately matters: the earnings, cash flow, and value the underlying business can sustainably produce.

The post How should investors approach ASX reporting season? appeared first on The Motley Fool Australia.

More reading

• Zip shares are going wild. What investors need to know
• Own VAS ETF? Here’s how your investment performed in FY26
• The bring-forward rule just got bigger. Here’s what that means for your superannuation
• 5 things to watch on the ASX 200 on Friday
• James Hardie shares are flying. Here’s why the rally may not be over

Motley Fool contributor Leigh Gant has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

If you have been waiting for a bigger window to top up your superannuation, it has just opened.

From 1 July 2026, the annual non-concessional contributions cap rose from $120,000 to $130,000.

This change flows through to the bring-forward rule, lifting the maximum three-year contribution from $360,000 to $390,000.

For anyone planning a large one-off contribution, an extra $30,000 of headroom is something to take advantage of.

What changed in superannuation on 1 July

Three numbers moved at the same time.

The concessional cap increased from $30,000 to $32,500, the non-concessional cap rose to $130,000, and the general transfer balance cap rose to $2.1 million.

All three increases are indexed to wages or prices, which is why they tend to move together rather than in isolation.

So, what is the transfer balance cap? The transfer balance cap sets the total superannuation balance thresholds that determine whether you can make after-tax contributions at all.

How the bring-forward rule actually works

The bring-forward rule lets eligible people under 75 use up to three years of non-concessional cap in a single financial year.

Rather than being held to $130,000, you can contribute up to $390,000 at once.

That is useful if you have sold an investment property, received an inheritance, or are making a final push in the years before retirement.

You do not apply for the arrangement. Instead, it triggers automatically the moment your non-concessional contributions exceed the annual cap in one financial year, which is why some people trigger it without meaning to.

Once triggered, the clock runs for three financial years regardless of whether you use the full amount.

The superannuation balance test that sets your limit

How much you can bring forward depends on your total superannuation balance at 30 June of the previous financial year.

The ATO sets out the tiers as follows: If your balance was below $1.84 million, you can access the full three years and contribute up to $390,000.

Between $1.84 million and $1.97 million, you get two years and a $260,000 limit.

Between $1.97 million and $2.1 million, you are held to the standard $130,000 annual cap.

At $2.1 million or above, your non-concessional cap is nil.

Those thresholds moved up alongside the transfer balance cap, which means some people who were locked out entirely last financial year are eligible to contribute again this year.

The trap that catches people out

Indexation does not apply once you are already inside a bring-forward period.

Your cap is locked at the amount that applied in the year you triggered it.

So, if you started a three-year arrangement in 2024-25 or 2025-26, you remain capped at $360,000 until that period expires.

It is an easy assumption to get wrong, and exceeding your cap means dealing with excess contributions tax and an amended assessment.

One further change is worth noting.

Division 296 also commenced on 1 July 2026, applying an additional tax to earnings attributable to total superannuation balances above $3 million.

Anyone contributing large sums while sitting near that threshold should factor this into their decision.

Foolish takeaway

Rather than investing in ASX blue chips like Commonwealth Bank of Australia (ASX: CBA) and BHP Group Ltd (ASX: BHP), investors should pay attention to how they can optimise their superannuation.

Bigger caps are good news, but they reward planning rather than enthusiasm.

The two questions to answer before contributing are the following: What was your total super balance on 30 June, and have you already triggered a bring-forward period?

Get both right and the new limits give you meaningfully more room to compound wealth inside super.

Earnings there are generally taxed at 15% rather than at your marginal rate, great news for investors serious about their retirement.

The post The bring-forward rule just got bigger. Here’s what that means for your superannuation appeared first on The Motley Fool Australia.

More reading

• 9 ASX 200 shares with refreshed buy ratings this week
• How much could a $100,000 ASX share portfolio pay in dividends?
• 3 key reasons to buy BHP shares today
• $10,000 invested in CBA shares 6 months ago is now worth…
• How many BHP shares do I need to buy for $10,000 of passive income?

Motley Fool contributor Mark Verhoeven has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

On Thursday, the S&P/ASX 200 Index (ASX: XJO) was on form and pushed higher. The benchmark index rose 0.2% to 8,839 points.

Will the market be able to build on this on Friday and end the week on a high? Here are five things to watch:

ASX 200 expected to sink

The Australian share market looks set to fall on Friday following a disappointing night of trade in the United States. According to the latest SPI futures, the ASX 200 is expected to open 65 points or 0.75% lower this morning. In late trade on Wall Street, the Dow Jones is down 1%, the S&P 500 is down 1.3%, and the Nasdaq is 2.3% lower. Tesla (NASDAQ: TSLA) shares are down 14% and weighing heavily on the latter.

Oil prices jump

ASX 200 energy shares Santos Ltd (ASX: STO) and Woodside Energy Group Ltd (ASX: WDS) could have a great finish to the week after oil prices jumped overnight. According to Bloomberg, the WTI crude oil price is up 5.8% to US$91.87 a barrel and the Brent crude oil price is up 6.65% to US$100.33 a barrel. This was driven by reports that tankers were struck off Saudi Arabia.

Polynovo shares downgraded

Polynovo Ltd (ASX: PNV) shares will be in focus today after the medical device company was downgraded by the team at Bell Potter. According to the note, the broker has downgraded Polynovo’s shares to a hold rating with a heavily reduced price target of $1.00 (from $2.00). It said: “We conclude that the top line growth rate is below our expectation and accordingly our target price is adjusted to reflect this change. Pending the full year earnings update, our initial reaction has been to slash the growth forecast to low double digit percentage growth going forward. For FY27 we now expect net sales to increase by ~$15m relative to the $20m increase achieved in FY26. We are particularly concerned by sequential period decline in US revenues in 2H26 in addition to the absence of a strategy in the outpatient care market.”

Gold price tumbles

ASX 200 gold shares Evolution Mining Ltd (ASX: EVN) and Newmont Corporation (ASX: NEM) could have a poor finish to the week after the gold price tumbled overnight. According to CNBC, the gold futures price is down 2.5% to US$4,048.5 an ounce. Rate hike concerns are weighing on the precious metal. Also, Newmont will be releasing its quarterly update this morning.

Buy Generation Development shares

Morgans sees value in Generation Development Group Ltd (ASX: GDG) shares. In response to its fourth-quarter update, the broker has retained its buy rating with an improved price target of $6.89 (from $6.28). It said: “GDG has provided a 4Q26 update. We saw this as a strong result highlighted by record Investment Bond sales, and importantly, Evidentia beating expectations after a run of consecutive misses. We lift our GDG EPS by +1%-5% over the forecast period, on higher sales and FUM expectations in both key divisions. Our price target is set at A$6.89 (previously A$6.28). We maintain our BUY recommendation, with >20% TSR upside.”

The post 5 things to watch on the ASX 200 on Friday appeared first on The Motley Fool Australia.

More reading

• Oil prices are rising again. What does that mean for these ASX energy shares?
• Here are the top 10 ASX 200 shares today
• Guess which $1.8 billion ASX 200 stock is leaping 33% on Thursday!
• Why is the Santos share price lifting off on Thursday?
• Generation Development Group posts 36% lift in FUM and record inflows for FY26

Motley Fool contributor James Mickleboro has positions in Woodside Energy Group Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended PolyNovo and Tesla. The Motley Fool Australia has recommended Generation Development Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

James Hardie Industries plc (ASX: JHX) shares have been on a rollercoaster over the past year.

Earlier this year, the building products giant lost around 40% of its value as investors worried about its large US acquisition, softer earnings, and governance uncertainty.

Fast forward to today, and sentiment has shifted dramatically. James Hardie shares jumped 6% on Thursday to $36.99, taking their gain for the year to almost 20%.

So, what’s driving the turnaround?

Better-than-expected earnings

The biggest catalyst was James Hardie’s preliminary first-quarter FY27 results.

The company reported consolidated net sales of between US$1.449 billion and US$1.475 billion, comfortably ahead of previous guidance of US$1.315 billion to US$1.354 billion.

Profit also surprised on the upside. EBITDA came in between US$399 million and US$407 million, well above management’s earlier guidance of US$354 million to US$375 million.

The stronger-than-expected result suggests the company is executing better than many investors in James Hardie shares had feared.

A market leader with pricing power

James Hardie remains the dominant fibre cement manufacturer in North America and Australia.

Its strong brand, extensive distribution network, and reputation for durable products create competitive advantages that are difficult for rivals to replicate. That market leadership has historically given the company pricing power, allowing it to lift prices even when demand softens.

The expansion into outdoor living products also broadens its addressable market and creates opportunities to cross-sell products across its customer base.

Over time, management of James Hardie shares expects those benefits to support stronger margins and earnings growth.

Experts remain optimistic

Fund manager L1 Capital believes the recent rally may not be the end of the story. The firm noted James Hardie shares climbed 46% during the three months to June, helped by easing geopolitical tensions and management’s constructive FY27 outlook.

L1 expects the company’s core North American fibre cement business to return to volume growth, supported by normalising inventories, stronger execution in repair and remodel markets, gains among smaller builders, competitor exits, and continued conversion from vinyl and timber products.

Importantly, L1 believes the market is still valuing James Hardie at a discount because of lingering concerns over execution, governance, and the US housing cycle.

If those concerns continue to fade, the fund manager sees scope for both earnings growth and a higher valuation multiple.

The risks remain

The biggest risk for James Hardie shares is still the US housing market.

Demand for new homes and renovation activity remains sensitive to mortgage rates and consumer confidence. If higher interest rates continue weighing on housing, James Hardie’s sales growth could slow.

After such a strong rebound, investors are also likely to demand continued earnings upgrades to justify further gains.

Foolish takeaway

James Hardie’s latest earnings update has reminded investors why the company has long been regarded as one of the ASX’s highest-quality industrial businesses.

While risks remain, particularly in the US housing market, improving execution and stronger-than-expected earnings suggest the recent rally of James Hardie shares could still have further room to run.

The post James Hardie shares are flying. Here’s why the rally may not be over appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• Why are James Hardie shares jumping 9% on Thursday?
• James Hardie posts strong Q1 FY27 earnings above guidance
• Experts say these ASX 200 shares have great potential
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Marc Van Dinther has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.