A wide range of S&P/ASX 200 Index (ASX: XJO) shares can deliver good returns, and even outperformance, if investors buy at the right price.

Cyclical stocks can deliver great investments if we buy at the weak point of the cycle. Be greedy when others are fearful, as the saying goes.

The investment team in charge of listed investment company (LIC) L1 Long Short Fund Ltd (ASX: LSF) have a great knack for picking out undervalued stocks that have a relatively low price-earnings (P/E) ratio. Its portfolio has returned an average of 16.9% per year over the prior five years, showing its stock-picking prowess.

We’re going to look at these ASX 200 shares that could be compelling businesses to own.

Qantas Airways Ltd (ASX: QAN)

L1 noted that the Qantas share price rose 27% in the three months to June 2026 following an approximate 50% decline in jet fuel prices after the easing of Middle East tensions, though fuel costs were still around 20% above pre-war levels.

The fund manager also noted that oil refining margins remain Qantas’ key residual headwind, which is still roughly double the pre-war level.

L1 highlighted that during an investor trip to the Airbus factory in Toulouse (France), management reiterated the $400 million operating profit (EBIT) opportunity from Project Sunrise ahead of the planned Sydney to London route service launch, which is scheduled for October 2027.

The fund manager said that overall, while the Middle East conflict has created near-term earnings volatility, it sees Qantas’ strong underlying competitive positioning and medium-term outlook as unchanged.

James Hardie Industries plc (ASX: JHX)

James Hardie is one of the largest building products ASX 200 shares. L1 noted that the James Hardie share price rose 46% in the three months to June 2026, amid easing Middle East tensions and management’s constructive FY27 outlook.

That positive outlook included a pathway to return the core North American fibre cement business to volume growth, despite a subdued US housing market.

L1 expects volume recovery to be supported by: normalisation of channel inventory after the 2025 destocking period; improved execution in repair and remodel; smaller-builder channels; the trim-over installation method; competitor exits; and continued material conversion from vinyl and wood.

In the fund manager’s view, the market is still applying a discounted multiple to the ASX 200 share to reflect recent execution, governance, and housing-cycle concerns. As those issues are addressed, L1 believes there is scope for both earnings growth and recovery in the P/E ratio multiple over time.

Goodman Group (ASX: GMG)

The final ASX 200 share in this article is industrial property developer and owner Goodman Group.

The Goodman share price rose 22% in the three months to June 2026, during a growing investor focus on its expanding data centre opportunity and the scarcity value of its powered land bank.

L1 said that the business has advanced its data centre strategy with the announcement of a 50:50 joint venture with DataBank for a 32MW co-location facility in Los Angeles. Its update also reaffirmed its FY26 operating earnings per security (EPS) guidance of growth of “at least 9%” and flagged work in progress (WIP) growth from $14.5 billion to around $18 billion by June.

Overall, the outlook for these ASX 200 shares looks positive, though they’re not the only shares I’d want to look at.

The post Experts say these ASX 200 shares have great potential appeared first on The Motley Fool Australia.

More reading

• Are Macquarie, Qantas, and WiseTech shares buys?
• Project Sunrise incoming: Are Qantas shares a buy?
• Here are the top 10 ASX 200 shares today
• Buy, hold, sell: James Hardie, Adairs, Minerals 260 shares
• Top brokers name 3 ASX shares to buy next week

Motley Fool contributor Tristan Harrison has positions in L1 Long Short Fund. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goodman Group. The Motley Fool Australia has recommended Goodman Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

One of the biggest decisions you can make about your superannuation is the investment option you choose.

Most funds offer a menu.

Two of the most popular are “balanced” and “high growth.” The choice sounds arbitrary, but over the decades, making the right choice can be worth a fortune.

Let’s compare them.

How the two options differ

A balanced option spreads your money across shares, property, bonds, and cash.

A balanced portfolio typically holds around 60% to 76% in growth assets, while the rest sits in more defensive assets.

A high growth option tilts far harder towards shares and often holds 85% or more in growth assets.

That means bigger swings, but higher expected returns over time.

What the returns tell us about your superannuation

History gives us a useful guide.

Over the 10 years to 30 June 2026, AustralianSuper’s balanced option returned an average of 8.47% a year.

Its high growth option returned 9.64% a year over the same period.

That difference may look small, but it is anything but.

On a large balance compounded over decades, roughly one extra percent a year adds up to serious money.

However, the trade-off is volatility.

High growth options fall harder when markets wobble, and if investors panic and switch at the bottom, they lock in the loss.

Discipline is the price of those higher returns.

Which option suits you?

The answer depends on your time horizon. If retirement is 20 years away, you can usually ride out the bumps, and as such, high growth may suit you.

If you are close to retirement, a steep fall could hurt.

A more balanced mix may help you sleep at night. Many people shift towards safer assets as they near retirement.

On top of that, your risk tolerance matters just as much as your age. The best strategy is the one you can actually stick with.

Three ASX funds that lean growth

Some investors also hold ASX-listed funds directly, inside or alongside their superannuation. Three growth-tilted ETFs stand out.

The Vanguard Australian Shares Index ETF (ASX: VAS) tracks the biggest ASX companies, and the iShares Core S&P/ASX 200 ETF (ASX: IOZ) offers similar broad local exposure. By contrast, the BetaShares Nasdaq 100 ETF (ASX: NDQ) adds global technology heavyweights.

Together, they show what a growth tilt can look like. Just remember that more growth means more volatility.

Foolish Takeaway for your superannuation

There is no single right answer for your superannuation.

High growth has historically delivered more over the long run. Balanced offers a smoother ride.

Match the option to your timeline and your temperament. Then leave it alone and let compounding do the work.

The post Should I target high growth or balanced strategies for my superannuation? appeared first on The Motley Fool Australia.

More reading

• 3 super ASX ETFs to buy and hold until 2046
• Why it’s vital for investors to look to international shares for growth: Expert 
• Own Vanguard ASX ETFs? It’s dividend payday!
• Own NDQ, GAME, or other Betashares ASX ETFs? It’s pay day for you!
• 3 amazing ASX ETFs I’d buy this month

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 positions in and has recommended BetaShares Nasdaq 100 ETF. The Motley Fool Australia has positions in and has recommended BetaShares Nasdaq 100 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Superannuation is a very effective tool for Australian investors to generate returns at a lower tax rate.

Pleasingly, superannuation has a lower tax rate than many individuals, trusts and companies. The way that superannuation works, and the nature of how we access the money, means it’s very easy to invest for the long term inside the super system.

In my view, being paid passive income is one of the best elements of owning shares. Receiving money into our bank account every year for no effort sounds good to me.

How does superannuation play into passive income? Investors lose less of the passive income payments to tax.

Superannuation looks comparatively much more appealing because if a full-time working Aussie receives passive income in their own name, they could lose a third (or more) of that passive income to tax, significantly reducing the effectiveness of the passive income return.

In my opinion, superannuation is therefore a more appealing place to invest because of the lower tax rate in the accumulation phase of life, compared to an individual’s tax rate if they’re a full-time earner.

In retirement, a person’s superannuation tax rate could be 0%. You can’t get any better than that.

Of course, each Australia’s tax position is different, so I’ll just look at targeting a particular income goal from here and ignore the tax rates.

How much is needed in superannuation for $100,000 of annual passive income?

Receiving $100,000 in dividends each year sounds excellent to me. I’m definitely a long way from that target, but I’d love to receive that much in dividends each year.

Australians need to consider what types of investments they want to own and what size dividend yield comes with those investments.

I think ASX shares are the best choice for passive income. The attached franking credits are an excellent bonus.

How much is needed to earn $100,000 annually depends on the dividend yield of the portfolio.

For example, a portfolio with a 6% dividend yield would require $1.67 million. Meanwhile, a 4% dividend yield would require a $2.5 million portfolio.

As you can see, different dividend yields require different-sized portfolios to reach the target. Therefore, the numbers are heavily influenced by what ASX shares superannuation investors choose.

The types of ASX dividend shares I’d buy

There are various options on the ASX that can provide good yields to investors. Aussies could choose quality companies, real estate investment trusts (REITs) or listed investment companies (LICs).

Some of my favourite ideas for dividend growth and a solid starting yield include Wesfarmers Ltd (ASX: WES), Telstra Group Ltd (ASX: TLS), Universal Store Holdings Ltd (ASX: UNI), Lovisa Holdings Ltd (ASX: LOV), Medibank Private Ltd (ASX: MPL), Propel Funeral Partners Ltd (ASX: PFP) and Washington H. Soul Pattinson and Co. Ltd (ASX: SOL).

On the commercial property side of things, I like names such as Rural Funds Group (ASX: RFF), Dexus Industria REIT (ASX: DXI), Centuria Industrial REIT (ASX: CIP) and Charter Hall Long WALE REIT (ASX: CLW).

Finally, the LICs that I really like include MFF Capital Investments Ltd (ASX: MFF), L1 Long Short Fund Ltd (ASX: LSF), Future Generation Global Ltd (ASX: FGG) and Future Generation Australia Ltd (ASX: FGX).

These aren’t the only attractive ASX dividend shares for superannuation investors, but I think they’re an excellent starting point.

The post How much is needed in superannuation to target a $100,000 annual passive income? appeared first on The Motley Fool Australia.

More reading

• $1,000 buys 584 shares in an incredibly reliable ASX dividend stock
• 2 ASX dividend shares with yields above 7%
• Should you buy, hold, or sell Wesfarmers shares?
• Here are the top 10 ASX 200 shares today
• How much do I need in my superannuation to earn an annual $60,000 passive income?

Motley Fool contributor Tristan Harrison has positions in Future Generation Australia, Future Generation Global, L1 Long Short Fund, Mff Capital Investments, Propel Funeral Partners, Rural Funds Group, 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 Lovisa, Washington H. Soul Pattinson and Company Limited, and Wesfarmers. The Motley Fool Australia has positions in and has recommended Mff Capital Investments, Rural Funds Group, Telstra Group, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Lovisa, 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.