ASX passive income shares are some of my favourite stocks to buy because they pay real cash flow into our bank accounts. Some of them have incredibly high dividend yields.
Uncertainty in the wider economy and higher interest rates have pushed share prices lower and, in turn, sent dividend yields higher.
With that in mind, there are a few high-yield names that come to mind, and the two below are among the most attractive.
Charter Hall Long WALE REIT (ASX: CLW)
The first business I want to highlight is this real estate investment trust (REIT), which has a highly diversified portfolio spanning sectors such as service stations, hotels, office buildings, Bunnings properties, and distribution centres.
Higher interest rates are particularly a headwind for REITs because they increase the cost of debt (which REITs tend to have), and it’s a headwind for property valuations. But I don’t expect interest rates to stay this high forever, meaning that this is a useful time to invest.
The Charter Hall Long WALE REIT unit price has dropped 24% in the past year (at the time of writing), but I don’t think the underlying business is worth 24% less than it was before.
It has several positive factors, including a weighted average lease expiry (WALE) of around 9 years, which provides long-term rental income security. That rent is regularly growing thanks to a mixture of fixed annual increases and inflation-linked increases.
The business plans to maintain its annual distribution at 25.5 cents per unit in FY27, which translates into a forward distribution yield of 8.4%.
WAM Microcap Ltd (ASX: WMI)
This listed investment company (LIC) is the other ASX passive income share idea that I want to highlight with a huge dividend yield.
LICs are a great structure because they allow investors to gain exposure to a portfolio of shares and can turn some of the generated investment profits into a steady (or growing) dividend.
WAM Microcap looks to invest in the smallest businesses on the ASX, ones with a market capitalisation under $300 million at the time of investment.
The LIC grew its regular annual dividend each year between FY18 and FY23, maintained it in FY24, and grew it slightly in FY25 and FY26.
Its FY26 annual dividend per share of 10.7 cents translates into a huge grossed-up dividend yield of 11.75%, including franking credits, at the time of writing. While the business only grew its annual dividend by 1% in FY26, any increase is useful when you’re talking about a double-digit yield.
WAM Microcap needs to keep delivering investment returns to grow its dividend, but its current profit reserve covers more than four years of payments at the current level.
$600 of passive income per month
Between the two stocks above, the average dividend yield is around 10%, including franking credits.
To reach $600 per month in income, we should set an annual goal, since they don’t pay monthly. The target is $7,200 per year. For that level of income, an investor would need around $72,000 invested in the two names above.
But I’d suggest spreading investment dollars across additional ASX share ideas that can generate returns, rather than putting too much in just two names.
The post 2 ASX passive income share ideas I’d use to generate $600 a month in 2027 appeared first on The Motley Fool Australia.
Should you invest $1,000 in Charter Hall Long Wale REIT right now?
Before you buy Charter Hall Long Wale REIT shares, consider this:
Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Charter Hall Long Wale REIT wasn’t one of them.
The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
And right now, Scott thinks there are 5 stocks that may be better buys…
* Returns as of 1 August 2026
.custom-cta-button p {
margin-bottom: 0 !important;
}
More reading
- How much do I need to retire on $85,000 a year at 50?
- 6 ASX REITs just hit 52-week lows. Do any brokers say buy?
- How much do I need to retire on $110,000 a year at 65?
- Where I’d invest in ASX shares after the recent RBA rate rise
- 2 very cheap ASX shares near 52-week lows I’d buy today
Motley Fool contributor Tristan Harrison has positions in Wam Microcap. 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.