How to invest $9,000 for passive income in superannuation?

One of best elements of Australia’s wealth and retirement system is superannuation, which offers lower tax rates compared to an individual’s tax rate for someone working full-time. Superannuation is appealing for passive income investing, whether that’s in retirement or building wealth towards retirement.

The obvious benefit of a lower tax rate is that it improves the net investment return.

If I were investing $9,000 into superannuation, I’d choose businesses that have long-term growth potential and can provide a dividend yield upfront as well.

Investing in superannuation can mean putting that money to work for many years, giving it more time for compounding.

I’ll outline two of the businesses I think are excellent long-term buys for passive income. If an investor had $9,000 (or more) to invest, I’d be highly supportive of the following ideas.

APA Group (ASX: APA)

In my view, APA has been one of the most stable ASX dividend shares over the last 20 years thanks to its energy portfolio.

Of course, share prices do regularly change. But, in terms of the dividend payout, APA has been extremely consistent for investors.

In terms of the payout, APA has hiked its annual distribution every year since 2004. That’s an impressive two decades of consistent growth, year after year.

Only one other business has grown its annual dividend for more consecutive years in a row than APA.

Its cash flow is a key metric that helps fund higher payouts. Its gas pipeline network is the key asset of its energy portfolio. A lot of APA’s revenue linked to inflation, giving the business protection against some of the headwinds its cost base is experiencing.

I like how the ASX share is investing in a variety of areas to boost its future earnings, including electricity transmission, batteries and gas-powered energy generation.

At the time of writing, APA’s FY26 distribution translates into a distribution yield of 5.4%.

With the retirement of Australia’s ageing coal power plants getting closer, other energy assets will become increasingly important, so APA has an important role to play in the future.

WCM Global Growth Ltd (ASX: WQG)

The other ASX share I want to highlight for superannuation investors wanting passive income is WCM Global Growth, a listed investment company (LIC) that focus on the global share market.

WCM aims to find companies with strengthening economic moats (competitive advantages).

An economic moat is what allows the business to stay ahead of its rivals and defend their market share/margins. A competitive advantage could be in the form of intellectual property, cost advantages and so on. When the competitive advantage is strengthening, it means the business is in an even stronger position to grow profit.

On top of that, WCM also wants to see the business has a corporate culture that enables the strengthening of its economic moat. I’d say a business doesn’t get better randomly, it’s through what the company does throughout its operations.

By hunting across the world for these high-quality businesses, WCM gives its portfolio a great chance to deliver outperformance because it can spread a very wide net to find those opportunities.

Since the LIC’s inception date in June 2017, its portfolio has delivered an average return per year of 15.8% after fees, outperforming the global share market by an average of more than 2%.

With that excellent level of investment return, the ASX dividend share has steadily grown its annual dividend each year since it started paying one in 2019. A few years ago, it changed to quarterly dividend payments – each quarter has seen an increase since June 2023.

The next year of dividends are guided to be 7.3%, including franking credits, at the time of writing. I think it’s a great investment for superannuation investors wanting passive income. I expect its dividend can continue rising in the coming years.

The post How to invest $9,000 for passive income in superannuation? appeared first on The Motley Fool Australia.

More reading

• Close to retirement? 4 ASX shares for decades of income
• Here are my 5 best ASX passive income stocks
• APA Group announces estimated FY26 final distribution, up 1.7%
• 2 rock-solid ASX dividend shares to buy this month
• How to make $2,000 of monthly passive income from ASX shares

Motley Fool contributor Tristan Harrison has positions in Wcm Global Growth. 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 Apa Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.