The Australian share market has traditionally delivered a return in the region of 10% per annum.

While that is a great return, there are ASX 200 shares out there with the potential to outperform this.

For example, the two buy-rated ASX 200 shares listed below have been tipped to rise by more than 20% over the next 12 months by brokers.

Here’s what they are saying about them:

NextDC Ltd (ASX: NXT)

The team at Morgans remains very bullish on this data centre operator following the release of its half-year results last month.

In response to the results, the broker has retained its buy rating with an improved price target of $20.50. Based on its current share price of $13.88, this implies potential upside of almost 50% for investors between now and this time next year.

Morgans highlights that the company is experiencing incredible demand for capacity in its data centres. So much so, it believes that it is destined to deliver EBITDA of $700 million in FY 2029 even if it didn’t win another contract before then. As a comparison, for the first half of FY 2026, NextDC reported EBITDA of $115.3 million, which annualises to approximately $230 million.

Commenting on the ASX 200 share, the broker said:

NXT sold more MWs in the month of December 2025 than in the preceding 36 months combined. It was a record sales period for enterprise and hyperscale. The 416MW now contracted underpins FY29 underlying EBITDA of >$700m (without new contract wins) and sees NXT trading on an undemanding ~22x EV/Contracted EBITDA, with upside potential. BUY retained and target price lifted to $20.50 from $19.00 following our upgrades.

Elders Ltd (ASX: ELD)

Bell Potter continues to believe that the market is undervaluing this ASX 200 share.

Last week, the broker retained its buy rating on the agribusiness company’s shares with a trimmed price target of $9.00. Based on its current share price of $7.26, this suggests that upside of approximately 25% is possible between now and this time next year.

It also expects a generous 5.4% dividend yield over the period, lifting the total potential return to approximately 30%.

Commenting on its buy recommendation, Bell Potter said:

Our Buy rating is unchanged. We see encouraging signs for FY26e, with livestock turnoff values exhibiting double digit YoY growth through 1H26TD, mitigated in part by dryer conditions through most of the summer cropping window and an easing in input price tailwinds. A more normal selling pattern in FY26e, delivery on SYSMOD and backward integration initiatives, and consolidation of Delta are expected to drive high double-digit EPS growth in FY26-27e. This view does not look reflected in the current share price, with ELD trading at 13.3x FY26e EPS.

The post These ASX 200 shares could rise 25% to 50% appeared first on The Motley Fool Australia.

More reading

• Buy, hold, sell: Fortescue, NextDC, and Woolworths shares
• Bell Potter just updated its guidance on these ASX 300 shares
• Why I’m still backing ASX growth shares for the long run
• Elders sells Killara Feedlot in $195.8m deal
• This ASX 200 tech stock is up 5% on results and ‘unprecedented demand’

Motley Fool contributor James Mickleboro has positions in Nextdc. 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 Elders. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The S&P/ASX 200 Index (ASX: XJO) had a very strong month in February and raced notably higher. The benchmark index rose 3.7% during the period to end at 9,198.6 points.

Not all ASX 200 shares climbed with the market. For example, the four named below fell 20% or more during the month. Here’s why:

Austal Ltd (ASX: ASB)

The Austal share price was out of form and sank 26% in February. This was driven by the release of a disappointing earnings guidance update from the ship builder. Austal advised that it previously overstated its potential earnings for the year after accidentally including incentives that had already been recognised in Austal USA’s forecast. This meant there was a US$17.1 million overstatement included in its FY 2026 EBIT guidance. In light of this, Austal downgraded its EBIT guidance for FY 2026 to approximately A$110 million from A$135 million previously.

CSL Ltd (ASX: CSL)

The CSL share price was sold off and crashed almost 20%. This was driven by a combination of a soft half-year result from the biotech giant and news that its CEO, Dr Paul McKenzie, resigned out of the blue a day earlier. CSL’s chair, Dr Brian McNamee AO, said: “Paul and the Board have determined that now is the right time for new leadership to continue to drive CSL’s strategic transformation and performance.” As for its results, CSL posted underlying NPATA of US$1.9 billion, which was down 7% on the prior corresponding period and short of expectations. However, it did reaffirm its guidance for FY 2026.

Pro Medicus Ltd (ASX: PME)

The Pro Medicus share price tumbled 29% in February. A good portion of this came after the health imaging technology company released its half-year results. Pro Medicus reported a 28.4% increase in revenue to $124.8 million and a 29.7% lift in underlying profit before tax to a record of $90.7 million. This was softer than some were expecting. Pro Medicus’ CEO, Dr Sam Hupert, said: “Our profits continue to grow strongly even though our biggest implementation during the period in Trinity Cohort 1 went live towards the end of October so had limited impact on the half.” In addition, concerns over AI disruption weighed heavily on software stocks last month.

Temple & Webster Group Ltd (ASX: TPW)

The Temple & Webster share price was a poor performer and sank 32% last month. This followed the release of the online furniture retailer’s half-year results. The company reported a 19.8% increase in revenue to $375.9 million and a more modest 13% lift in EBITDA to $14.9 million. This ultimately led to Temple & Webster recording a net profit that was over 30% lower than consensus estimates.

The post These ASX 200 shares sank 20% or more in February appeared first on The Motley Fool Australia.

More reading

• 3 ASX ETFs for a stress-free start to investing
• How to make $25,000 of passive income a year
• 3 Australian growth stocks to buy in 2026
• Why Nvidia’s insights suggest ASX tech shares are undervalued
• ASX 200 at a record high? Here’s where I still see value

Motley Fool contributor James Mickleboro has positions in CSL, Pro Medicus, and Temple & Webster Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL and Temple & Webster Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Pro Medicus. The Motley Fool Australia has recommended CSL, Pro Medicus, and Temple & Webster Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

If I were 25 and had $10,000 ready to invest in ASX shares today, I wouldn’t be chasing dividends.

I wouldn’t be trying to time the market either.

At that age, your biggest advantage isn’t stock-picking skill. It’s time. Decades of compounding can turn sensible decisions into serious wealth. So the ASX share portfolio I’d build would focus on growth, resilience, and long-term structural tailwinds.

Here’s how I’d think about it.

Give your ASX share portfolio a broad market core

Even at 25, I wouldn’t go all-in on individual stocks.

I’d want a solid foundation that gives exposure to the Australian market. For that, I’d use the Betashares Australian Quality ETF (ASX: AQLT).

This exchange-traded fund (ETF) provides instant diversification across many of Australia’s highest-quality companies. It reduces single-stock risk and ensures I’m participating in overall economic growth.

Allocation: $4,000

That gives the portfolio a stable core while leaving room to lean into higher-growth opportunities.

Add global exposure

Australia is a great market, but it’s small on a global scale.

At 25, I’d want exposure to the US and other developed markets, especially in sectors we lack locally, such as global tech and advanced healthcare.

For that, I’d add the Vanguard MSCI Index International Shares ETF (ASX: VGS).

This ETF provides exposure to over 1,000 international companies, spreading risk across regions and industries.

Allocation: $3,000

Now we have a diversified base across Australia and the world.

Add a high-quality ASX growth stock

With 40+ years until retirement, I’d be comfortable allocating part of the portfolio to a high-quality growth business.

One I like for a young investor is ResMed Inc (ASX: RMD).

ResMed operates in sleep and respiratory health, with long-term structural drivers such as ageing populations and rising awareness of sleep apnoea. It generates strong cash flow, reinvests heavily in innovation, and benefits from a connected digital ecosystem.

This is the kind of company I’d be comfortable holding for decades.

Allocation: $1,500

Add a scalable Australian compounder

I’d also want exposure to a domestic business with strong competitive advantages and a long growth runway.

One example is Hub24 Ltd (ASX: HUB).

Hub24 continues to grow funds under administration as advisers migrate to modern platforms. With structural tailwinds from the shift to professional financial advice and superannuation growth, I think it has long-term compounding potential.

At 25, I can tolerate volatility if the long-term story remains intact.

Allocation: $1,500

What this portfolio looks like

• $4,000 in Australian market ETF
• $3,000 in global market ETF
• $1,500 in a global healthcare growth leader
• $1,500 in an Australian platform compounder

It’s diversified. It has global exposure. It leans into growth. And it keeps things simple.

Foolish Takeaway

You don’t need perfect stock picks. You need time, patience, discipline, and exposure to growing businesses.

If I were starting at 25 today, this is the mix I’d feel comfortable building around. It gives me market exposure, global reach, and long-term growth potential.

From there, I’d focus less on daily price moves and more on steadily building the portfolio. Because at 25, the greatest asset isn’t cash. It’s time.

The post The $10,000 ASX share portfolio I’d build for a 25-year-old today appeared first on The Motley Fool Australia.

More reading

• 3 ASX ETFs for a stress-free start to investing
• 2 incredible ASX share investments I’d buy to build long-term wealth
• How to make $25,000 of passive income a year
• The lazy investor’s guide to ASX ETFs
• If I had to build an ASX share portfolio from scratch today, here’s how I’d do it

Motley Fool contributor Grace Alvino has positions in Hub24. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Hub24 and ResMed. The Motley Fool Australia has positions in and has recommended ResMed. The Motley Fool Australia has recommended Hub24 and 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.

Want to start investing without constantly checking share prices or second-guessing every earnings update? Broad-market ASX ETFs can take the pressure off.

With one trade, you get exposure to hundreds – even thousands – of companies, spreading risk and reducing the need to pick individual winners.

Here are 3 ASX ETFs that can offer a genuinely stress-free start to investing.

Betashares Australia 200 ETF (ASX: A200)

This ASX ETF is a straightforward way to own Australia’s 200 largest listed companies. Blue chips such as Commonwealth Bank of Australia (ASX: CBA), BHP Group Ltd (ASX: BHP) and CSL Ltd (ASX: CSL) dominate its portfolio.

In one trade, you’re effectively buying a slice of the Australian economy. It spans from banks and miners to healthcare leaders and retailers. A200 ETF is known for its ultra-low management fee, which helps maximise long-term compounding.

While banking and mining heavyweights dominate the Australian market, this ETF provides broad, diversified exposure. All without the stress of choosing individual blue chips.

Vanguard MSCI Index International Shares ETF (ASX: VGS)

This fund opens the door to developed markets worldwide. This ASX ETF holds thousands of companies across the United States, Europe and parts of Asia.

Among its largest holdings are global giants such as Apple Inc (NASDAQ: AAPL), Amazon.com Inc (NASDAQ: AMZN) and NVIDIA Corp (NASDAQ: NVDA). That exposure adds powerful technology and innovation leaders that are underrepresented on the ASX.

By spreading your money across multiple economies and industries, VGS ETF can help smooth returns over time. However, currency movements may influence performance in the short term.

iShares Core S&P/ASX 200 ETF (ASX: IOZ)

This ASX ETF is rounding out the trio. Like A200, IOZ ETF focuses on Australia’s largest 200 companies, tracking the S&P/ASX 200 Index (ASX: XJO). Its top holdings closely mirror the leaders of the local share market, including retail giant Wesfarmers Limited (ASX: WES) and Macquarie Group Ltd (ASX: MQG), alongside the major banks and miners.

This ASX fund offers strong liquidity and exposure to the companies that drive much of the ASX’s overall performance.

Foolish Takeaway

The beauty of these ASX ETFs is their simplicity. You can choose one as a starting point or combine Australian exposure through A200 or IOZ with global diversification via VGS.

Instead of chasing hot tips, you own broad sections of the market and let time and compounding do the heavy lifting.

For investors who want a calm, disciplined entry into the share market, that kind of structure can make all the difference.

The post 3 ASX ETFs for a stress-free start to investing appeared first on The Motley Fool Australia.

More reading

• The $10,000 ASX share portfolio I’d build for a 25-year-old today
• These ASX 200 shares jumped 15% or more in February
• 2 incredible ASX share investments I’d buy to build long-term wealth
• The one question I always ask before buying an ASX share
• Why Nvidia’s insights suggest ASX tech shares are undervalued

Motley Fool contributor Marc Van Dinther has positions in BHP Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon, Apple, CSL, Macquarie Group, Nvidia, and Wesfarmers. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool Australia has recommended Amazon, Apple, BHP Group, CSL, Nvidia, Vanguard Msci Index International Shares ETF, and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

It’s common knowledge that geographic diversification in your portfolio is critical. But one common misconception is that achieving it means investing on overseas exchanges. And historically, there was truth to that. Geographic location was a good indicator of a stock’s primary market exposure. But today, using domicile alone can be deceiving.

Here’s why earnings diversity is critical – and how you can achieve it without leaving the ASX.

It’s likely your risks are already concentrated in Australia

Most Australian investors instinctively look to the ASX for their first and often biggest investments. It feels familiar, you’re dealing in Australian dollars, you may avoid some additional tax filing requirements, and your money stays in Australia’s highly regulated environment. And that’s before we even get into the benefits of Australia’s franking credits system. 

But Australia is a small pond. It makes up less than 2% of the global equity market and only 0.33% of the world’s population, so you risk putting all your eggs in one very small basket. 

Additionally, it’s likely that you’re heavily exposed to the Australian economy before you start your portfolio. Your job, your salary, your house and most of your large assets probably sit here. And for most Australians, superannuation is tilted toward domestic shares. It means you’re already flying in one weather system, and if a storm hits the Australian economy, you’re exposed to it on many fronts.

The good news is that you can achieve global exposure without leaving the ASX.

Follow the money on the ASX

Where a company is located is largely irrelevant today. In fact, you could build a portfolio across the ASX, NASDAQ, Nikkei and FTSE, assuming you have achieved diversification, and still be disproportionately invested in one region because that’s where your investments make most of their revenue.

Instead of looking for overseas-based companies to achieve this, you can follow the money and stay on the ASX, by considering:

• Where does the company earn most of its income?
• Where are the majority of its customers based?
• What currency does it transact in?

It’s these factors that determine its exposure to economic, social, regulatory and geopolitical – and, therefore, your geographic diversification.

What ASX shares can I invest in to gain global exposure?

You can build geographic diversity on the ASX with some solid performers. Here are three that are worth a look to get you started:

• Amcor PLC (ASX: AMC) The packaging giant makes most of its money in the US (50%), followed by Western Europe (28%). In fact, Australia and New Zealand combined account for only 1% of its revenue.
• Codan Ltd (ASX: CDA):  Codan makes most of its communications technology and metal detecting equipment sales across North America (40%), Europe and the Middle East (29%) and Africa (18%).
• Brambles Ltd (ASX: BXB):  This large supply chain logistics player brings most of its sales revenue from the Americas (55%) and Europe and the Middle East (37%).

Foolish bottom line

When your income, assets and super are already tied to Australia, doubling down by investing purely in Australian‑centric companies can leave you over-exposed to one economic climate. By focusing on earnings geography rather than company location, you open your portfolio to the other 98% of global market opportunity, all without leaving the relative comfort of the ASX.

The post Diversification: Why earnings geography matters more than company location appeared first on The Motley Fool Australia.

More reading

• In Wilsons Advisory’s ideal portfolio, what are the 10 top stock picks?
• 2 ASX growth shares set to soar higher in 2026
• Top brokers name 3 ASX shares to buy today
• 3 ASX shares that look cheap according to Morgans
• Why I’d forget NAB shares and buy these top Aussie stocks

Motley Fool contributor Melissa Maddison 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 positions in and has recommended Amcor Plc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The S&P/ASX 200 Index (ASX: XJO) was on form in February and managed to carve out a gain of 3.7%.

While that was strong, some ASX 200 shares delivered far more for their lucky shareholders.

Here’s why these shares jumped more than 15% last month:

BHP Group Ltd (ASX: BHP)

The BHP share price surged 15.5% in February. Investors were buying the mining giant’s shares following the release of its half-year results. BHP reported an 11% increase in revenue to US$27.9 billion and a 25% lift in underlying EBITDA to US$15.46 billion. A key driver of this growth was its copper operations, which reported record EBITDA of US$8 billion. This meant that copper contributed the majority of earnings for the first time in its history. Another positive was news that BHP has entered into a long-term streaming agreement with Wheaton Precious Metals Corp. (NYSE: WPM). The Big Australian will receive an upfront payment of US$4.3 billion. In exchange, it will deliver Wheaton a share of silver produced at the Antamina mine in Peru. This agreement represents the most valuable streaming transaction to date based on the upfront consideration.

Commonwealth Bank of Australia (ASX: CBA)

The CBA share price raced 17% higher during the month. Australia’s largest bank impressed the market with its half-year results in February. For the six months, CBA reported a 6% increase in cash net profit to $5,445 million and lifted its fully franked interim dividend by 4% to $2.35 per share. CBA’s CEO, Matt Comyn, said: “Economic growth strengthened during the half, driven by increases in consumer demand and rising investment in AI and energy infrastructure.”

Lynas Rare Earths Ltd (ASX: LYC)

The Lynas Rare Earths share price was on fire and rocketed 27% in February. This followed the release of the rare earths producer’s half-year results. Lynas posted a 63% increase in revenue to $413.7 million and net profit after tax of $80.2 million. The latter compares to a profit of just $5.9 million a year earlier. The company’s CEO and managing director, Amanda Lacaze, said: “The December half of FY2026 was an exciting one for Lynas. We completed commissioning for the Mt Weld expansion project, delivered the first half year of Heavy Rare Earth production at Lynas Malaysia, launched the Towards 2030 growth strategy and successfully completed an equity raising to support our growth agenda.”

PLS Group Ltd (ASX: PLS)

The PLS share price rose 21% during the month. This was driven by the release of a strong half-year result from the lithium miner. PLS’ revenue jumped 47% to $624 million and its underlying EBITDA surged 241% to $253 million. This was driven by a combination of higher production volumes, lower costs, and a rebound in lithium prices. PLS’ managing director and CEO, Dale Henderson, said: “PLS delivered a strong first half, generating Underlying EBITDA of $253 million at a 41% margin reinforcing our low cost position and ability to generate positive EBITDA through the cycle. The result was driven by higher realised pricing, reliable operating performance and continued cost discipline, with unit operating costs declining 8% to $563 per tonne (FOB).”

The post These ASX 200 shares jumped 15% or more in February appeared first on The Motley Fool Australia.

More reading

• The one question I always ask before buying an ASX share
• Here are the top 10 ASX 200 shares today
• Why the Lynas share price could crash almost 40%
• Game on! BHP retakes biggest ASX stock crown as CBA shares sink
• BHP share price has 20% more growth to come: expert

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 recommended Lynas Rare Earths Ltd. 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.

Investing in (ASX) shares for the long-term is a powerful tool because of how compounding and profit growth can lead to great results for shareholders.

If an investment goes up by an average of 10% per year – roughly the long-term return of the global share market – it will double in approximately eight years. If something goes up in value by 15% per year it’ll double in just five years.

No investment is guaranteed to go up by that much, but certain areas of the share market look destined to outperform the S&P/ASX 200 Index (ASX: XJO) over the long-term because of their earnings growth, global ambitions and profitability.

I’m going to talk about two exchange-traded funds (ETFs) that I think are very appealing. I’m calling them ASX shares because they provide access to shares and trade on the ASX.

Vanguard MSCI index International Shares ETF (ASX: VGS)

There are a number of high-quality ASX shares that we can buy, but the ASX only makes up approximately 2% of the global share market. I think it’s a good idea to be invested in good businesses from the other 98%.

The VGS ETF provides low-cost exposure to many of the world’s largest companies that are listed in ‘major’ developed countries.

We’re talking about markets like the US, Japan, the UK, Canada, Germany, France, Switzerland, the Netherlands, Sweden, Spain, Italy, Hong Kong, Denmark and Singapore.

As you can see, it’s extremely diversified geographically and that helps reduce risk and accesses profit generation from across the world.

Secondly, VGS ETF owns a significant number of businesses. At the end of 31 January 2026, it had 1,286 positions, which means it’s very diversified.

But, it’s not appealing because it owns lots of businesses from various countries. To me, that’s just a useful bonus.

These are impressive businesses within the portfolio that have delivered good returns – the VGS ETF has returned an average of 15.1% per year. While past performance is not a guarantee of future performance, the future looks bright.

It’s invested in companies like Nvidia, Apple, Alphabet, Microsoft, Amazon, Meta Platforms, Costco and Intuitive Surgical – these businesses have the biggest influence on the VGS ETF’s return because they have the largest allocations. You don’t find this sort of growth potential with blue-chip ASX shares. The US giants are investing in new services like AI and other technology that could drive earnings higher.

Vanguard reported that the portfolio had an earnings growth rate of 21.2%, which is a strong tailwind for future share price growth. Additionally, it had a return on equity (ROE) of 19.8%, showing its quality and implies the level of return it can generate on future retained profits that are invested in the business.

VanEck Morningstar Wide Moat ETF (ASX: MOAT)

This is another ETF that doesn’t invest in ASX shares. Instead, it invests in high-quality US shares that have strong economic moats.

An economic moat is another word for competitive advantages, which is a key element that keeps a company ahead of challengers. A moat could be a cost advantage, brand power, intellectual property, network effects and so on. The stronger the moat, the harder it is for a business to hurt the market share/profit margin.

The MOAT ETF invests in businesses that Morningstar analysts believe the economic moat will endure (more likely than not) for the next 20 years. With that strategy, it gives me a lot of confidence to invest in the fund for the long-term.

In addition to that, the MOAT ETF only invests in businesses when analysts think that the business is trading at good value.

The effectiveness of that strategy has enabled the MOAT ETF to deliver an average return per year of 15.7% over the past decade. I plan to buy more of this ETF in the coming years, though it’s important to note that past performance is not a guarantee of future returns.

The post 2 incredible ASX share investments I’d buy to build long-term wealth appeared first on The Motley Fool Australia.

More reading

• How to make $25,000 of passive income a year
• The lazy investor’s guide to ASX ETFs
• If I had to build an ASX share portfolio from scratch today, here’s how I’d do it
• How I’d Invest $25,000 in Vanguard ETFs today
• 5 amazing ASX ETFs to buy and hold for 20 years

Motley Fool contributor Tristan Harrison has positions in VanEck Morningstar Wide Moat ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Amazon, Apple, Costco Wholesale, Intuitive Surgical, Meta Platforms, Microsoft, and Nvidia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2028 $520 calls on Intuitive Surgical and short January 2028 $530 calls on Intuitive Surgical. The Motley Fool Australia has recommended Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, VanEck Morningstar Wide Moat ETF, and 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.

If your goal is to build wealth steadily over decades without constantly adjusting your portfolio, the iShares S&P 500 ETF (ASX: IVV) could be close to the ideal buy and hold investment.

Let’s dig into the reasons why this could be the case.

The iShares S&P 500 ETF is home to the world’s best

As its name implies, the iShares S&P 500 ETF is an exchange traded fund (ETF) that tracks the S&P 500 index, which includes 500 of the largest listed companies in the United States.

That means exposure to global leaders such as Apple (NASDAQ: AAPL), Microsoft (NASDAQ: MSFT), and Berkshire Hathaway (NYSE: BRK.B). These businesses dominate industries ranging from technology to healthcare to consumer goods.

Rather than trying to identify which single company will win, this ETF gives you broad exposure to the entire ecosystem of American corporate strength.

Over time, the S&P 500 index has proven to be one of the most reliable engines of wealth creation in modern markets.

Built-in diversification

One of the biggest risks for individual investors is concentration.

Buying a single stock can produce strong returns, but it also exposes you to company-specific risks. The iShares S&P 500 ETF spreads your investment across hundreds of stocks and multiple sectors.

Technology, healthcare, financials, industrials, and consumer brands all sit within the portfolio. If one sector struggles, others can offset the weakness.

That diversification makes it easier to stay invested during volatile periods.

Long-term compounding power

The S&P 500 has historically delivered average annual returns close to 10% over the long run, though this is never guaranteed.

At that rate, $10,000 invested and left untouched for 20 years could grow to roughly $67,000. Stretch that to 30 years and the power of compounding becomes even more dramatic.

This fund does not try to beat the market. It simply aims to track it. For many investors, matching long-term market returns is more than enough.

Simplicity that works

One of the most powerful aspects of this ASX ETF is its simplicity.

There are no active managers making subjective calls. The fund passively tracks an index that has stood the test of time.

That simplicity reduces decision fatigue and helps investors avoid the temptation to constantly trade.

Foolish takeaway

The iShares S&P 500 ETF offers exposure to leading global companies, built-in diversification, and a long track record of strong returns.

For investors who want a straightforward buy and hold strategy, it could be a simple way to back the long-term growth of the world’s largest economy.

The post Why the iShares S&P 500 ETF could be a perfect buy and hold investment appeared first on The Motley Fool Australia.

More reading

• How to make $25,000 of passive income a year
• 3 excellent ASX ETFs to buy for an SMSF in March
• 5 amazing ASX ETFs to buy and hold for 20 years
• How to build serious wealth with ASX shares
• 3 ASX ETFs for beginner investors to buy in March

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 positions in and has recommended Apple, Berkshire Hathaway, Microsoft, and iShares S&P 500 ETF. The Motley Fool Australia has recommended Apple, Berkshire Hathaway, Microsoft, and iShares S&P 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The ASX dividend share space is a great place to find investments offering passive income.

I think the stock market is the best hunting zone to find names that can pay a good dividend yield, deliver capital growth and organically raise the passive income. Other non-share investments just don’t seem as appealing on that side of things.

If I’m investing for passive income, which I regularly do, I want to focus on investments that can give me a high level of confidence that they’re going increase the payout annually for the foreseeable future.

I really like the three ASX dividend shares below for dividends and potential capital growth. Let’s dive into why I’d happily spread $10,000 across them.

MFF Capital Investments Ltd (ASX: MFF)

MFF Capital is mostly a listed investment company (LIC), but also has a new funds management segment called Montaka.

The main way MFF makes profit for shareholders is by holding a portfolio of high-quality global shares that are expected to compound earnings in the coming years. By just investing in the best businesses in the world, it has produced solid returns which have helped it fund growing dividends to MFF shareholders.

It also recently acquired Montaka to give MFF access to more investment ideas and research, while also unlocking another earnings growth avenue. A rise in the fund size of Montaka Global Fund – Active ETF (ASX: MOGL) and Montaka Global Extension Fund – Complex ETF (ASX: MKAX) helps generate management fee earnings for MFF.

MFF has guided it’s going to pay an annual dividend per share of 21 cents in FY26, which translates into a grossed-up dividend yield of 6.1%, including franking credits, at the time of writing. That means the ASX dividend share is expecting to increase its FY26 dividend by more than 20% year-over-year.

WCM Global Growth Ltd (ASX: WQG)

WCM Global is another LIC with an impressive record of portfolio performance and dividend growth.

The investment team at WCM – based in California’s Laguna Beach – aim to look for businesses with an expanding economic moat/improving competitive advantages. The LIC also wants to find businesses that have a corporate culture that fosters the improvement of that economic moat.

Its portfolio mix of US shares and international shares provides investors with diversified holdings, along with compelling potential to deliver returns.

By investing in those high-quality names, WCM Global Growth has managed to outperform the global share market return, whilst paying a rising dividend over the last several years.

The ASX dividend share expects to pay an annual dividend in FY26 that equates to a grossed-up dividend yield of 6.7%, including franking credits, at the time of writing.

Washington H. Soul Pattinson and Co Ltd (ASX: SOL)

I couldn’t write this article without mentioning the leader of dividend growth on the ASX, Soul Patts.

It’s an investment conglomerate that has already been listed on the ASX for more than 120 years and it hasn’t missed paying a dividend in all of that time. Additionally, the business has increased its regular annual payout every year since 1998, which is an incredible record for an ASX dividend share.

The business has built an impressive and largely uncorrelated portfolio across a variety of defensive sectors that can provide cash flow for the business in most economic conditions, giving resilient funding for the growing dividend. The ASX dividend share regularly invests to expand its portfolio and boost its long-term growth potential. I’m forecasting that Soul Patts could pay an annual dividend per share in FY26 that at least translates into a grossed-up dividend of 4.2% (if not more), including franking credits, at the time of writing.

The post Where I’d invest $10,000 into ASX dividend shares right now appeared first on The Motley Fool Australia.

More reading

• Top ASX shares to buy with $10,000 in 2026
• Why I just bought this 6%-yielding ASX dividend stock and plan to buy even more
• 1 Australian stock I’d buy on any dip
• I’d buy 20,409 shares of this ASX stock to aim for $2,000 of annual passive income
• Want to build a second income? I’d buy these ASX shares today

Motley Fool contributor Tristan Harrison has positions in Mff Capital Investments and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Mff Capital Investments. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

$25,000 a year is just over $480 a week. For some, that could cover rent. For others, it might fund travel, school fees, or the freedom to reduce working hours.

But how could I build an asset base that can sustainably produce it?

Here’s a quick guide that could help on this quest.

Know the passive income target

If I aim for a 5% portfolio dividend yield, generating $25,000 a year would require roughly $500,000 invested.

That might sound intimidating. But it is possible in time.

I just need to start by building the capital to produce this passive income.

Focus on building capital

Many investors make the mistake of chasing high dividend yields too early.

However, in the early years, growth is often more powerful than income. Companies that reinvest profits at high returns can compound capital faster than traditional dividend payers.

For example, businesses such as ResMed Inc. (ASX: RMD), REA Group Ltd (ASX: REA), or Pro Medicus Ltd (ASX: PME) may not offer meaningful dividend yields today, but their ability to grow earnings can expand my portfolio value significantly over time.

Broad ETFs such as the iShares S&P 500 ETF (ASX: IVV) or the VanEck Morningstar Wide Moat ETF (ASX: MOAT) can also help accelerate capital growth while keeping diversification intact.

The goal in this phase is not income. It is scale.

Time is my best friend

If I were to invest $1,500 a month and achieve an average 10% annual return over the long term (not guaranteed but historically achievable), my portfolio would grow surprisingly fast.

After 10 years, I would have around $300,000, and after 15 years, I would have approximately $600,000.

As you can see, a snowball effect becomes visible after patience has been exercised.

Transition to income producers

Once my portfolio approaches the $500,000 mark, I can gradually rotate toward income-focused assets.

At present, that might include shares such as APA Group (ASX: APA), Transurban Group (ASX: TCL), or Telstra Group Ltd (ASX: TLS). Income-focused ETFs like Vanguard Australian Shares High Yield ETF (ASX: VHY) could also play a role.

At an average 5% dividend yield across the portfolio, a $500,000 portfolio generates $25,000 per year. Increase the yield slightly or allow dividends to grow over time, and the income can expand further.

Foolish takeaway

Passive income is rarely built in a single leap. It is built in stages.

First, grow the capital. Then, convert that capital into reliable income streams. It may take time, but it is certainly worth it.

The post How to make $25,000 of passive income a year appeared first on The Motley Fool Australia.

More reading

• 3 Australian growth stocks to buy in 2026
• Why Nvidia’s insights suggest ASX tech shares are undervalued
• Here are the top 10 ASX 200 shares today
• 3 excellent ASX ETFs to buy for an SMSF in March
• ASX 200 at a record high? Here’s where I still see value

Motley Fool contributor James Mickleboro has positions in Pro Medicus, REA Group, ResMed, and VanEck Morningstar Wide Moat ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended ResMed, Transurban Group, and iShares S&P 500 ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Pro Medicus. The Motley Fool Australia has positions in and has recommended Apa Group, ResMed, Telstra Group, and Transurban Group. The Motley Fool Australia has recommended Pro Medicus, VanEck Morningstar Wide Moat ETF, Vanguard Australian Shares High Yield ETF, and iShares S&P 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.