The Vanguard Australian Shares High Yield ETF (ASX: VHY) is a very appealing option for a high dividend yield and it could be a strong option for passive income.

The purpose of the VHY ETF is to provide low-cost exposure to ASX shares that have higher forecast dividends relative to other ASX shares.

It achieves diversification by restricting the proportion of the portfolio invested in any one industry to 40% of the total ETF and 10% in any one company. Australian real estate investment trusts (A-REITs) are excluded from the portfolio entirely.

Given that many of the ASX’s largest blue-chip shares also offer sizeable dividend yields, it’s not surprising that many of its biggest holdings are also the largest in Australia.

Major holdings

At the end of August 2026, its biggest holdings were:

• BHP Group Ltd (ASX: BHP)
• Commonwealth Bank of Australia (ASX: CBA)
• National Australia Bank Ltd (ASX: NAB)
• Westpac Banking Corp (ASX: WBC)
• ANZ Group Holdings Ltd (ASX: ANZ)
• Rio Tinto Ltd (ASX: RIO)
• Woodside Energy Group Ltd (ASX: WDS)
• Macquarie Group Ltd (ASX: MQG)
• Telstra Group Ltd (ASX: TLS)
• Transurban Group (ASX: TCL)

Perhaps unsurprisingly, more than 70% of the portfolio is invested ASX financial shares, ASX mining shares and ASX energy shares, which are known for paying large passive income most years.

The portfolio has 92 holdings, though the biggest names carry the largest weightings. The ten names I highlighted above accounted for 61.6% of the total ETF portfolio.

VHY ETF dividend yield

Because the portfolio focuses on passive income and the attractive franking credits that can come with dividends paid by Australian companies, Vanguard reports its dividend yield both excluding and including franking credits.

According to the forecast dividends from FactSet – which Vanguard uses as a dividend data provider – the VHY ETF dividend yield excluding franking credits is forecast to be 4.2%.

Including franking credits (sometimes referred to as a ‘grossed-up dividend yield’), the forecast dividend yield is 5.6%.

What would it take to generate $1,000 of passive income?

The number of VHY ETF shares (called ‘units’) needed to generate $1,000 in dividends depends on whether we include franking credits in the total.

If we exclude franking credits, an investor would likely need about 282 VHY ETF units to generate $1,000 in passive income, assuming the dividend projection is close to reality.

If franking credits are included, then an investor would likely need an estimated 212 VHY ETF units.

It’s a solid option, with the dividends coming from a somewhat diversified portfolio. However, I’d want to add other ASX shares in there too for additional dividend diversification because it is quite heavily focused on a limited number of industries and a tilt towards a few large names.

The post How much must I invest in VHY ETF shares to earn a $1,000 passive income in 2027? appeared first on The Motley Fool Australia.

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• 3 ASX ETFs that are a perfect compliment to your superannuation
• How to earn $10,000 in passive income a month with these ASX dividend shares
• Term deposits are paying more than ever. Are ASX dividend shares still worth it?

Motley Fool contributor Tristan Harrison 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 Macquarie Group and Transurban Group. The Motley Fool Australia has positions in and has recommended Telstra Group and Transurban Group. The Motley Fool Australia has recommended BHP Group, Macquarie Group, and Vanguard Australian Shares High Yield ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Broking house Morgans has released new research reports on two companies, which it says will increase in value by almost a third over the next 12 months.

Let’s see who they like.

Nufarm Ltd (ASX: NUF)

Morgans writes in its research note on the food sector that conditions are ripening for soft commodities to perform well, with two “genuine supply shocks” hitting the sector.

The broker said world food prices rose for a third straight month in August, heading close to a four-year high, but still 17% below the March 2022 peak.

Part of the reason includes Russia and Ukraine attacking each other’s Black Sea ports, with Russian exports at their lowest since 2016, and Ukraine’s at a 16-year low, Morgans said.

Also impacting prices were drought conditions which had affected wheat output globally, “and there appears near-certain odds on El Niño running through to February 2027”.

Morgans said Nufarm was their top pick in the agricultural sector.

They added:

The new management team continues to turn the business around and are ungearing the balance sheet, with the focus on quality of earnings. 1H26 came in at the upper end of guidance, setting up strong FY26 EBITDA growth on normal seasonal conditions. Investor Days on 28-29 September are the next catalyst.

Morgans has a $4.15 price target on Nufarm shares compared to $3.16 at the time of writing.

If achieved, this would be a 31.3% return. Nufarm is valued at $1.25 billion.

SGH Ltd (ASX: SGH)

Morgans has actually downgraded its price target for SGH shares, but is still predicting a 31.3% return.

The downgrade has come about as a result of SGH’s 30% shareholding in Beach Energy Ltd (ASX: BPT) and negative earnings revisions from Beach in a report in early August.

Morgans said:

SGH is an industrial compounder with a decade-long record of EBIT growth, underpinned by three market-leading businesses exposed to durable Australian thematics: 1) mining production (WesTrac), 2) infrastructure/construction (Boral, Coates), and 3) Transitional Energy. The key investment thesis rests on continued margin improvement at Boral, operating leverage across a largely fixed-cost industrial asset base, and disciplined capital recycling at a 15% return on capital employed hurdle.

Morgans said that with the balance sheet deleveraging, debt capacity was rebuilding for another potential acquisition.

Morgans has a buy rating on SGH shares with a price target of $48, down from $50.

SGH is valued at $14.9 billion. Beach Energy shares are currently 25.2% lower over a 12-month period.

The post Morgans tips both of these ASX shares to rise 31% appeared first on The Motley Fool Australia.

More reading

• Why this ASX 200 stock is a compelling buy with 30% upside
• 40 ASX shares with ex-dividend dates next week
• Bell Potter says this ASX 200 stock is a buy
• 5 things to watch on the ASX 200 on Thursday

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.

There are plenty of ASX dividend shares that could help investors build a passive income stream.

But which ones could be worth buying now?

Let’s take a look at three shares that could offer attractive income in the coming years.

Accent Group Ltd (ASX: AX1)

The first ASX dividend share to consider is Accent Group.

It is a major footwear and apparel retailer with brands including The Athlete’s Foot, Platypus, Hype DC, and Stylerunner. It also has exposure to well-known international footwear brands such as Skechers.

Accent has been battling difficult retail conditions, which have weighed heavily on earnings and its share price.

However, the company has a strong position in the Australian footwear market and a large store network that could benefit when consumer spending improves.

As a result, income investors may want to consider buying Accent shares while sentiment is weak and potentially benefit from a recovery in earnings and dividends.

Morgans is expecting a fully franked 4.9 cents per share dividend in FY 2027. Based on its current share price of 69 cents, this equates to a dividend yield of 7.1%.

Cedar Woods Properties Ltd (ASX: CWP)

Another ASX dividend share that could be worth considering is Cedar Woods Properties.

The property developer has a portfolio of residential communities, apartments, townhouses, and commercial developments across Australia.

What makes Cedar Woods attractive is its exposure to the country’s ongoing need for housing.

Population growth, housing shortages, and demand for well-located communities could support the company’s development pipeline for many years.

Cedar Woods also has a long history of returning profits to shareholders through dividends.

The team at Bell Potter expects this trend to continue. It has forecast a fully franked FY 2027 dividend of 44 cents per share. Based on its current share price of $6.49, this would mean a forward dividend yield of approximately 6.8%.

Woolworths Group Ltd (ASX: WOW)

A final ASX dividend share to look at is Woolworths.

The supermarket giant offers a different type of income opportunity to the first two companies.

Its yield is lower, but its earnings are supported by one of the most defensive industries in the country.

Australians need to buy groceries regardless of what is happening with interest rates, employment, or consumer confidence. This gives Woolworths a relatively dependable revenue base.

For investors seeking passive income from a mature, cash-generating business, Woolworths could be a strong option.

Morgans is forecasting a fully franked dividend of $1.08 per share in FY 2027. This represents a dividend yield of approximately 2.8%.

The post Why these ASX dividend shares could be buys for passive income appeared first on The Motley Fool Australia.

More reading

• Which ASX dividend shares are buys for passive income?
• 5 ASX shares I’d recommend to beginners
• How much do I need in superannuation to receive $1,000 passive income per week?
• Sell alert! Why this expert is calling time on Woolworths and CBA shares
• Worried about a downturn? 3 ASX shares and 3 ETFs built to weather it

Motley Fool contributor James Mickleboro has positions in Accent Group and Woolworths Group. 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 Accent Group and Cedar Woods Properties. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.