Superannuation funds have had a solid start to the financial year, with the median growth fund growing by 1.1% over the first two months, according to industry research company Chant West.

Volatility not hindering superannuation returns

Chant West said despite concerns around inflation and ongoing geopolitical tensions, superannuation funds gained ground in August with the median growth fund, with 61% to 80% of its funds in growth assets, gaining 0.9%.

Chant West Head of Superannuation Investment Research Mano Mohankumar said the healthy return for August was driven by domestic and global share markets, which in aggregate account for about 55% of a typical growth portfolio.

He added:

Despite some volatility towards the latter part of August, over the full month, developed market international shares advanced 2.5% in hedged terms led by the US. Markets were supported by strong corporate earnings and the tech sector regained momentum after some AI-related companies had been sold down in July. The Australian dollar appreciated over the month, which pulled the 2.5% hedged return back to 0.5% in unhedged terms. On average, super funds have about 70% of international shares unhedged. Emerging markets also finished higher, returning 1.3%.

Mr Mohankumar said Australian shares gained 1.6% over August, falling short of international markets but still a solid result.

A stronger resources sector offset weakness among financial shares, he said.

High growth portfolios led the gains over August with 1.2% growth, with all growth second with 1.1%, and growth third on 0.9%.

Mr Mohankumar said over the long term, superannuation had outperformed its aims.

Since the introduction of compulsory super in July 1992, the median growth fund has returned 8% p.a. The annual CPI increase over the same period is 2.7%, giving a real return of 5.3% p.a. – well above the typical 3.5% target. Even looking at the past 20 years, which includes three major share market downturns – the GFC in 2007-2009, COVID-19 in 2020, and the high inflation and rising interest rates in 2022 – super funds have returned 6.9% p.a., which is still ahead of the typical objective.

Time for a superannuation check-up?

If you’re looking to top up your super, it’s worth reading up on concessional contributions.

Concessional contributions include the amount contributed by your employer, but can also include extra amounts paid into your super on top of that.

This can be tax-effective, as these contributions are taxed at just 15%, meaning you could get tax back at the end of the year if your tax rate is higher than this.

The cap for such contributions, including your employer’s contribution, salary sacrifice amounts, and extra contributions, is $32,500 per year.

The post Superannuation has had a strong start to the year. See how much it’s up already appeared first on The Motley Fool Australia.

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Motley Fool contributor Cameron England 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.

Buying your first few ASX shares can feel overwhelming when there are thousands of companies to choose from.

For a beginner, I would keep things fairly simple and focus on established businesses that are easy to understand and have strong long-term prospects.

These five would be high on my list.

Macquarie Group Ltd (ASX: MQG)

Macquarie would be one of the first shares I would consider.

The company operates across areas including asset management, infrastructure, commodities, financial markets, banking, and advisory.

For a beginner, I think that provides an interesting introduction to a financial business that looks quite different from the major Australian banks.

Macquarie earns money from managing assets for clients, helping businesses manage commodity and financial risks, lending, and providing other financial services around the world.

That gives the company several ways to grow as its operations expand.

Earnings can move around from year to year, so I would not expect a perfectly smooth ride. But for someone investing with a long-term view, I think Macquarie is a high-quality business with plenty of opportunity still ahead of it.

Woolworths Group Ltd (ASX: WOW)

Woolworths is another ASX share I think beginners should consider.

Most Australians are familiar with its supermarkets and the role they play in everyday spending.

Grocery demand is also fairly dependable. People may cut back on discretionary purchases when budgets become tighter, but they still need food and household essentials.

I think Woolworths also has opportunities to grow through population growth, online shopping, and continued improvements across its stores and supply chain.

The company pays dividends as well, which can give new investors another way to see how owning shares can generate returns over time.

Telstra Group Ltd (ASX: TLS)

Telstra would add a more defensive element.

Mobile phones and internet connections have become essential services for households and businesses, giving Telstra recurring demand through different economic conditions.

The company has also made sustainable dividend growth an important part of its plans.

I would not expect Telstra to deliver spectacular growth every year. But I think there is value in owning a business with dependable demand, established infrastructure, and regular cash returns to shareholders.

ResMed Inc. (ASX: RMD)

ResMed would give beginners stronger growth potential.

The company develops devices, masks, and software for sleep apnoea and respiratory care.

I like how large the opportunity remains. Sleep apnoea is significantly underdiagnosed and undertreated globally, leaving ResMed with plenty of potential patients still to reach.

There is also recurring demand after someone begins treatment because masks and other accessories need replacing over time.

For a beginner, I think ResMed offers a good introduction to owning an ASX share with a genuinely global business.

BHP Group Ltd (ASX: BHP)

BHP would round out my five picks.

The mining giant gives investors exposure to commodities including iron ore and copper, which remain important to construction, manufacturing, electrification, and infrastructure.

BHP’s earnings can change significantly as commodity prices move, which is worth understanding before investing.

At the same time, its scale, strong balance sheet, and long-life assets make it one of the more established ways to gain exposure to the resources sector.

The company can also return substantial cash to shareholders when conditions are strong.

Foolish takeaway

I think all five companies give beginners something different to learn about investing.

Macquarie provides exposure to global financial markets, Woolworths and Telstra have businesses built around regular household demand, ResMed brings international healthcare growth, and BHP introduces the commodity cycle.

For someone researching their first few ASX shares, I think each is a sensible place to start.

The post 5 ASX shares I’d recommend to beginners appeared first on The Motley Fool Australia.

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Motley Fool contributor Grace Alvino has positions in Commonwealth Bank Of Australia and Wesfarmers. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended ResMed and Wesfarmers. The Motley Fool Australia has positions in and has recommended ResMed and Telstra Group. The Motley Fool Australia has recommended BHP Group and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Retirement investing does not have to be all about chasing the highest dividend yield.

I would still want businesses that can grow over time, while also providing some income along the way.

These three ASX shares would be on my list.

Wesfarmers Ltd (ASX: WES)

Wesfarmers is one of the first ASX shares I would consider.

The group owns businesses including Bunnings, Kmart, Officeworks, and Priceline, giving it several sources of earnings across different parts of the Australian economy.

For retirement investors, I like the combination of established businesses and room for further growth.

Bunnings has built a powerful position in home improvement, while Kmart continues to benefit from its focus on affordable products. Wesfarmers also has the financial strength to invest in existing businesses or pursue new opportunities when management sees attractive returns.

The company has also paid dividends consistently over many years.

Commonwealth Bank of Australia (ASX: CBA)

CBA would give me a more traditional source of income.

The bank generates substantial profits from its large customer base across home lending, deposits, business banking, and other financial services.

That has allowed it to return significant amounts of cash to shareholders through fully franked dividends.

Australian banking is a mature industry, so I would not expect rapid earnings growth.

But for retirement, I would be comfortable owning a high-quality business capable of producing substantial cash flow while still gradually increasing earnings over time.

CBA is rarely the cheapest bank on the ASX, but I would be willing to pay a little more for what I think is the strongest banking business in Australia.

Sigma Healthcare Ltd (ASX: SIG)

Sigma would be the more growth-focused choice of the three ASX shares.

Following its combination with Chemist Warehouse, the company now has exposure to one of Australia’s best-known pharmacy brands alongside a major pharmaceutical distribution operation.

I think there are several ways the business can become larger over the next decade.

Chemist Warehouse continues to expand its store network, while international markets such as New Zealand and the United Kingdom provide additional room for growth.

Sigma can also benefit from the wider pharmacy ecosystem, including distribution, retail sales, online channels, and relationships with suppliers.

While its dividend yield is not the largest, if the company can expand earnings over time, there should be greater scope for shareholder returns to increase.

Foolish takeaway

For me, retirement would not mean giving up on growth.

I would want some dependable income, but I would also want businesses capable of becoming more valuable over the years ahead.

Wesfarmers, CBA, and Sigma each offer a different balance between those two goals, which is why I would be comfortable considering any of them for a long-term retirement portfolio.

The post 3 ASX shares I’d buy for income and growth in retirement appeared first on The Motley Fool Australia.

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Motley Fool contributor Grace Alvino has positions in Commonwealth Bank Of Australia and Wesfarmers. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Wesfarmers. The Motley Fool Australia has recommended Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.