Author: openjargon

The ASX growth share Siteminder Ltd (ASX: SDR) could be one of the most undervalued businesses on the ASX right now. Experts believe the ASX stock could deliver great returns from here.

As the above chart shows, the Siteminder share price has sunk around 50% since October 2025. But, investor fears about AI could be overblown and the company’s ongoing financial success with its hotel software may help justify a resurgence.

Experts predict big returns

According to CMC Invest, the business has a 100% positive backing from analysts who have rated the business within the last three months – all six were a buy.

The average price target on the ASX growth share is $6.35. A price target tells us where analysts think the business will be trading in a year from now. Therefore, at the time of writing, those analysts suggest the Siteminder share price could rise by 63% over the next year.

The most optimistic price target is $7.32, implying a possible rise of around 90%. Even the most pessimistic price target is $5.30, suggesting a rise of 36%, which would very likely be a market-beating return if that happened.

Price targets are not guarantees, of course, but it’s clear that analysts think the business is undervalued, and I believe the company is delivering what it needs to for long-term success.

Strong financial performance

Two of the most important things that an ASX growth share can do is grow its revenue and increase its profit margins. When a business does that, it can lead to a rapidly improving bottom line, which is usually what investors value a business on.

It’s winning in a number of ways, including attracting new hotels, growing its average revenue per user (ARPU), offering its distribution engine to other hospitality software providers, and growing its profit margins.

In the FY26 half-year result, annualised recurring revenue (ARR) grew by 29.7% to $280.3 million thanks to the accelerating contributions from its smart platform modules, alongside its continued strength across the broader business.

It also reported in HY26 that ARPU grew 11.3% to $435 and net property additions were 2,900 (taking the total to 53,000) – its current focus is winning larger hotels.

On the margin side of things, the adjusted group gross margin improved by 98 basis points to 67.8%, while the adjusted operating profit (EBITDA) more than doubled in dollar terms to $12.3 million.

If ARR continues growing at well over 20% per year, I think the ASX growth share can deliver a wonderful performance for investors in the next three years.

According to the forecast on CMC Invest, it’s projected to generate 11.7 cents of earnings per share (EPS) in FY28. That means, at the time of writing, the Siteminder share price is valued at 32x FY28’s estimated earnings. I believe it’s a great time to invest in this business for the long-term.

The post Why experts think this ASX growth share can rise 63% in a year appeared first on The Motley Fool Australia.

More reading

• 2 ASX growth shares to buy now while they’re on sale
• Here are the top 10 ASX 200 shares today
• How to invest in ASX shares during such an uncertain period
• Here are the top 10 ASX 200 shares today
• Why Galan Lithium, Life360, Select Harvests, and Siteminder shares are storming higher

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

It’s been a down year thus far for ASX 200 shares. 

Australia’s benchmark index has experienced volatility in 2026. 

This has been due to several headwinds including inflation, interest rate hikes and global conflict. 

At the time of writing, the S&P/ASX 200 Index (ASX: XJO) is essentially flat for the year to date.

The case for defensive shares

With market volatility continuing to rattle investors in 2026, defensive ASX shares are once again proving their worth. 

Companies operating in essential sectors such as consumer staples, utilities, and telecommunications tend to generate relatively stable earnings regardless of economic conditions. 

This makes them attractive when growth stocks are under pressure. 

While defensive shares may not deliver the market’s biggest gains during bull runs, their ability to preserve capital, maintain reliable cash flows, and often pay consistent dividends can provide valuable stability during uncertain periods. 

For long-term investors, the recent market weakness could present an opportunity to accumulate high-quality defensive businesses at more attractive valuations while positioning a portfolio to better withstand further volatility.

Here are three examples of defensive shares that have held steady in 2026 and outperformed the ASX 200. 

Woolworths Group Ltd (ASX: WOW)

Woolworths shares are a popular defensive option amongst investors. 

As one of Australia’s supermarket giants, it sells essential products that consumers continue to buy regardless of economic conditions. 

This resilience helps support relatively stable revenue and cash flow, making Woolworths a popular choice for investors seeking stability during periods of market volatility.

This has been on full display this year, as Woolworths shares have risen almost 20% year to date. 

Telstra Group Ltd (ASX: TLS)

Telstra is often viewed as a defensive stock because it provides essential telecommunications services that households and businesses rely on regardless of economic conditions. 

Its recurring revenue from mobile, internet, and infrastructure services helps support relatively stable cash flows even during periods of market volatility.

So far in 2026, it has been able to shake some of the broader market sell-offs and rise just over 5%. 

It also provides some volatility relief through its historically high dividend yield, which can also provide passive income during down periods of capital growth. 

Transurban Group (ASX: TCL)

Finally, Transurban Group is considered defensive because it operates toll roads that generate predictable, usage-based revenue from essential commuter and freight traffic. 

Its long-term concession agreements and inflation-linked pricing features further enhance the stability and visibility of its cash flows through economic cycles.

The company has seen its share price rise 6% so far year to date, outperforming the broader ASX 200. 

The post Which defensive shares are outperforming the ASX 200 appeared first on The Motley Fool Australia.

More reading

• TPG Telecom just raised its dividend. Here’s what that means for income investors
• 3 strong ASX dividend shares for retirees to buy
• Australia’s minimum wage just rose 4.75%. Here is what it means for ASX consumer stocks
• Are Woolworths shares a good buy for passive income?
• Why’s the ASX 200 falling today despite another tech rally?

Motley Fool contributor Aaron Bell 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 Transurban Group. The Motley Fool Australia has positions in and has recommended Telstra Group, Transurban Group, and Woolworths Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

On Wednesday, the S&P/ASX 200 Index (ASX: XJO) had a positive session and raced higher. The benchmark index rose 0.7% to 8,785.7 points.

Will the market be able to build on this on Thursday? Here are five things to watch:

ASX 200 expected to tumble

It looks set to be a poor session for Australian investors on Thursday after a poor night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 65 points or 0.75% lower this morning. In the United States, the Dow Jones was down 1.2%, the S&P 500 fell 0.75%, and the Nasdaq dropped 0.9%.

Megaport shares on watch

Megaport Ltd (ASX: MP1) shares will be on watch today if they return from their trading halt. The network solutions company is currently undertaking a capital raising after announcing four new artificial intelligence (AI) infrastructure contracts with a combined total contract value of approximately $458.9 million. Megaport’s CEO, Michael Reid, said: “AI inference is becoming a global infrastructure challenge, not simply a GPU problem. As AI adoption accelerates, organisations need seamless access to GPUs, CPUs, storage, and the connectivity that powers them. Megaport is built to deliver it all.”

Oil prices rise

It could be a good day for ASX 200 energy shares Woodside Energy Group Ltd (ASX: WDS) and Santos Ltd (ASX: STO) after oil prices charged higher overnight. According to Bloomberg, the WTI crude oil price is up 2.7% to US$96.31 a barrel and the Brent crude oil price is up 2.1% to US$98.00 a barrel. An escalation in US-Iran tensions sent oil prices charging higher last night.

Buy SRG shares

The SRG Global Ltd (ASX: SRG) share price has more than doubled in value over the past 12 months. Despite this, Bell Potter believes the diversified industrial services company’s shares are good value. In response to a contracts update, the broker has retained its buy rating with an improved price target of $4.25 (from $3.15). It said: “Management have demonstrated a strong track-record of operational execution, delivered accretive acquisitions (Diona and TAMS in recent years) and guidance outperformance. We see upside to consensus earnings forecasts from forthcoming guidance upgrades and accretive acquisitions. With FCF expanding over FY26-28, we anticipate SRG will be well capitalised to self-fund acquisitions.”

Gold price drops

It looks likely to be a tough session for ASX 200 gold shares Newmont Corporation (ASX: NEM) and Northern Star Resources Ltd (ASX: NST) on Thursday after the gold price dropped overnight. According to CNBC, the gold futures price is down 1.15% to US$4,467.4 an ounce. Higher oil prices have fuelled inflation and rate hike fears.

The post 5 things to watch on the ASX 200 on Thursday appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• Why the ASX 200 is rallying despite a weaker growth warning
• Why Acrow, Ampol, Medallion Metals, and Northern Star shares are racing higher
• Why is everyone talking about Megaport, Ampol and Northern Star shares on Wednesday?
• 2 major ASX gold companies which can go much higher according to brokers

Motley Fool contributor James Mickleboro has positions in Megaport and Woodside Energy Group Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Megaport. The Motley Fool Australia has recommended Srg Global. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Telecommunications stocks are not usually associated with excitement.

They are owned for yield, not growth, and they tend to move slowly in both directions.

TPG Telecom Ltd (ASX: TPG) has offered investors rather less stability than the sector’s reputation might suggest, with shares down 30% over the past twelve months.

But this week’s Investor Day contained a commitment that income investors specifically should pay close attention to.

What TPG said at its Investor Day

TPG Telecom held its annual Analyst and Investor Day on Tuesday 3 June 2026.

The company presented a first-half 2026 trading update alongside its medium-term strategic direction.

TPG delivered two important messages for income investors.

First, mobile service revenue continues to grow strongly. The company forecasts 70,000 to 80,000 new mobile subscribers in the first half of FY2026. EBITDA growth is also expected to outpace revenue growth as the company’s cost discipline takes hold.

Second, and most importantly for dividend investors, management confirmed that dividend growth is expected to continue in line with sustainable profit and cash flow growth.

This is a meaningful upgrade to the dividend policy from prior years when capital was being prioritised for debt reduction.

The financial transformation behind the dividend commitment

The dividend growth commitment is credible because of the financial transformation underpinning.

In FY2025, TPG’s operating free cash flow almost doubled to $1.91 billion. This was a dramatic improvement from prior years when heavy capital expenditure on the mobile network consumed the bulk of cash generation.

Net bank borrowings fell from $4.1 billion to $1.361 billion over the same period, dramatically reducing the financial risk that had previously constrained dividend capacity.

Total FY2025 dividends paid were $0.18 per share, franked at 30%.

Management is now guiding for FY2026 EBITDA of $1.665 billion to $1.735 billion and capital expenditure of approximately $750 million.

This combination implies continued strong free cash flow generation and growing capacity to lift the dividend.

The current yield picture

At the current TPG share price, the trailing dividend yield sits at approximately 4.9% on a partially franked basis.

This yield does not compare unfavourably to the big four banks, particularly ANZ Group Holdings Ltd (ASX: ANZ) and Westpac Banking Corp (ASX: WBC), which carry their own earnings risks in the current high-rate environment.

Furthermore, the partially franked dividend does carry some franking credit value for Australian taxpayers. This should improve their effective after-tax yield above the headline figure.

The key question for income investors is not the current yield but the trajectory.

A business with nearly doubling free cash flow, dramatically lower debt, and a new dividend growth policy is precisely the setup from which reliable income growth tends to emerge over a three to five-year horizon.

The risks worth knowing

TPG’s broadband subscriber base has been declining as the company shifts focus toward mobile and away from legacy fixed-line services.

This transition has created some revenue headwinds in the near term that management is working to offset through cost reduction and mobile subscriber growth.

The company also flagged that spectrum renewal costs from 2028 represent a capital expenditure risk that will need to be managed carefully.

Competition from Telstra (ASX: TLS) and Optus in the mobile market remains intense, and any meaningful loss of mobile market share would directly threaten the earnings trajectory that underpins the new dividend policy.

Foolish takeaway

TPG shares have underperformed the market significantly over the past year.

That underperformance has created a more attractive entry point for income investors than has been available in some time.

A dividend growth commitment backed by nearly doubling free cash flow and dramatically reduced debt is not something to overlook.

For patient income investors comfortable with a telco turnaround story, TPG shares deserve serious consideration.

The post TPG Telecom just raised its dividend. Here’s what that means for income investors appeared first on The Motley Fool Australia.

More reading

• Why the RBA’s next move could be the most important event for ASX shares in 2026
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• Brokers rate these 5 ASX 200 shares as a sell!
• Why Evolution Mining, JB Hi-Fi, Scentre Group, and TPG Telecom shares are falling today
• TPG Telecom posts mobile growth and strong free cash flow in 2026 update

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 no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

DroneShield Ltd (ASX: DRO) shares slumped further into the red at the close of the ASX on Wednesday afternoon.

After the bell rang on the sharemarket for the day, DroneShield shares ended 4.36% lower at $3.07 a piece.

The decline means the ASX defence shares are now down 18% over the past month. And are around 8% lower for the year-to-date.

What has dragged DroneShield shares lower over the past month?

It looks like a combination of governance and regulatory has dampened investor sentiment recently.

In mid-May, DroneShield announced that it had received a notice from the Australian Securities and Investments Commission (ASIC) asking for reasonable assistance with an investigation under the Corporations Act.

The investigation relates to market announcements and share trading between the 1st and 20th or November 2025.

The company made several announcements during this time, including new contract announcements and news that several executives were selling DroneShield shares through on-market trades.

It’s unclear if any of these are under investigation by ASIC.

The company said it will cooperate fully and that it is unclear what action, if any, may result.

Governance issues and regulatory investigations often weigh heavily on investor confidence, especially for growth stocks where sentiment is already important.

Investors weren’t happy with the notice and the share price crashed around 20% in just over a week. 

The update came amid a background of signs of easing conflict in the Middle East. While heightened conflict can increase interest in defence technology, particularly counter-drone systems, signs of easing can do the opposite.

It looks like investor sentiment has now cooled.

Is there any upside ahead? Or is this the beginning of the next downturn?

It’s not only investor sentiment about DroneShield shares which has shifted, analysts have also changed their outlook.

In late-May, TradingView data showed two analyst ratings – one as a strong buy, and the other as a hold. The average target price was $4.10.

But today shows a very different story.

The latest TradingView data shows three analysts ratings – one is a strong buy, one a sell and one a strong sell.

This is a huge shift in sentiment.

The average target price is also lower at $3.29. Although it still implies a potential 7% upside at the time of writing.

The company has experienced staggering financial growth, notably surging revenues from a massive surge in global counter-drone demand. 

But it looks like analysts now view the DroneShield shares are trading at fair value.

The post DroneShield shares slump 18% in a month: Has the ASX defence stock finally lost steam? appeared first on The Motley Fool Australia.

More reading

• Should I buy DroneShield shares after its US contract win?
• Why DroneShield, Pro Medicus, SRG Global, and Woodside shares are charging higher today
• DroneShield shares jump as fresh US defence deal fires up investors
• Why DroneShield, Lendlease, PlaySide, and ResMed shares are tumbling today
• What happened to DroneShield shares in May?

Motley Fool contributor Samantha Menzies 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 DroneShield. 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.

Wesfarmers Ltd (ASX: WES) shares are in the spotlight this week.

At the close of the ASX on Wednesday afternoon, the conglomerate’s shares ended marginally lower, down 0.15% to $79.03 a piece.

Wesfarmers shares have now rebounded around 11% from a 52-week low recorded in late-May. But they’re still 3% lower for the year-to-date and 6% below trading levels seen this time last year.

For context, the S&P/ASX 200 Index (ASX: XJO) is around 1% higher for the year-to-date and 4% higher than 12 months ago, at the time of writing. 

So, why are Wesfarmers shares catching investor attention this week?

Earlier this week, Wesfarmers made a major business restructuring announcement.

In a post to the ASX, Wesfarmers said that the Industrial and Safety businesses, Blackwoods and Workwear Group, will transition into Wesfarmers-owned Bunnings Group.

Management said the change is expected to improve operational efficiencies, strengthen Bunnings’ position in the small and medium-sized business market. This is all while also retaining Blackwoods and Workwear Group as standalone brands.

The Industrial and Safety businesses will transition to Bunnings on 1 July 2026. Their financial contributions will be included in Bunnings’ results for the first half of the 2027 financial year. 

Bunnings will continue to disclose key sales metrics excluding Blackwoods and Workwear Group, such as total retail sales and store-on-store sales. 

Wesfarmers does not expect to record any material one-off costs associated with the transition and will provide further updates at its full-year results in August 2026.

The announcement comes ahead of Wesfarmers’ upcoming annual strategy briefing day next week. 

Management is expected to provide updates on Bunnings’ growth planes, Kmart and Officeworks financial performance, and the long-term earnings outlook.

It looks like investors are buying back into the shares in the hope that the update will be impressive.

What’s next for the shares?

According to TradingView data, analysts are reserved about the outlook for Wesfarmers shares over the next 12 months.

Out of 11 analysts, seven have a hold rating on the Bunnings and Kmart owner’s shares. Another two have a buy or strong buy rating, and two have a sell rating.

The average $75.21 target price implies a potential 5% downside at the time of writing. Meanwhile, some analysts think the shares could climb 6% higher to $84, and others think Wesfarmers shares could sink another 17% to $65.97.

The post Why is everyone talking about Wesfarmers shares this week? appeared first on The Motley Fool Australia.

More reading

• How combining superannuation and ASX shares can set you up for retirement better than property
• How much is needed in superannuation to target a $9,000 monthly passive income?
• 5 years ago, $10,000 bought 181 Wesfarmers shares. But how many would it buy now?
• Australia’s minimum wage just rose 4.75%. Here is what it means for ASX consumer stocks
• Why’s the ASX 200 falling today despite another tech rally?

Motley Fool contributor Samantha Menzies 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 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.

When it comes to ASX dividend stocks, Shaver Shop Group Ltd (ASX: SSG) is a long-term high-yield player.

At the close of the ASX on Wednesday afternoon, Shaver Shop shares had fallen 1.57% to $1.26 a piece.

The drop means that ASX dividend stock’s shares are now down around 16% for the year-to-date and are 5% lower than this time last year.

As a discretionary retail business, which sells personal grooming products online and in store, Shaver Shop shares are sensitive to changes in consumer spending.

That means the company has faced headwinds from higher inflation and cost of living woes this year. Consumers have cut bank on discretionary spending while finances are tight, and this has had a negative impact on the company’s revenue and earnings growth.

Earlier this year, Shaver Shop posted a positive but modest FY26 half-year result, but it came short of investor expectations.

The ASX dividend stock was also removed from the All Ordinaries Index (ASX: XAO) as part of a quarterly rebalance in March, further damaging investor sentiment.

Some investors might be put off by the falling share price and company headwinds. But I think the latest dip presents a rare opportunity to buy the high-yielding ASX dividend stock for cheap.

Here’s why.

Consistent long-term dividends

The ASX dividend stock has paid a regular semi-annual dividend payment to shareholders for years. 

Shaver Shop started paying a dividend to investors in 2017 and has gradually increased its annual payout each year ever since, with the exception of FY24 when the dividend payment was unchanged.  

A reasonable valuation

The business is currently trading on a price to earnings (P/E) ratio of around 11. This is relatively low compared to many other ASX consumer stocks.

The benefit of a lower P/E ratio is that it can help support a higher dividend yield.

A high yielding ASX dividend stock

The ASX dividend stock most recently paid investors an interim dividend of 4.8 cents per share, fully franked, in March. 

The ASX dividend share’s latest two half-year dividends total 10.3 cents per share. That translates into a grossed-up dividend yield of around 8%, including franking credits, at the time of writing.

The retailer is forecast to pay shareholders between 10.5 cents and 10.9 cents per share for FY26.

Growth plans in place

Shaver Shop is continuing to push forward with plans to grow its profits and increase its dividend paying for investors. 

This ASX dividend stock is driving growth by expanding its store network in Australia and New Zealand, boosting online sales, launching private brands like Transform-U, and securing exclusive supplier agreements.

The post 1 ASX dividend stock down 16% I’d buy right now appeared first on The Motley Fool Australia.

More reading

• 3 ASX dividend shares to block out the noise and lock in a yield as high as 11%
• Is this ASX dividend share a buy for its 11% dividend yield?
• 2 ASX shares with dividend yields above 8%

Motley Fool contributor Samantha Menzies 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 recommended Shaver Shop Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

History shows that the S&P/ASX 200 Index (ASX: XJO) can bring average yearly returns around 9%. 

Unfortunately for investors, 2026 is shaping up to be a down year. 

At the time of writing, Australia’s benchmark index is sitting almost in the same position as the start of the year. 

Why international diversification matters 

While the Australian share market has delivered strong long-term returns, it makes up only a small portion of the global share market.

That means investors who only own ASX shares are missing out on many of the world’s largest and fastest-growing companies. 

International diversification can help reduce reliance on the performance of Australian banks, miners, and energy companies, while providing exposure to global leaders in sectors such as technology, healthcare, consumer brands, and artificial intelligence. 

It can also smooth portfolio returns when the local market is struggling, as different economies and industries often perform well at different times.

With the ASX 200 treading water in 2026, adding international ETFs could be a simple way for investors to access new growth opportunities and build a more resilient portfolio.

Here are three ideal options to diversify away from Australian equities. 

BetaShares Nasdaq 100 ETF (ASX: NDQ)

This ASX ETF is one of the most popular funds for Australian investors and one of the largest by market cap. 

The fund aims to track the performance of the Nasdaq 100 Index. 

The Nasdaq 100 comprises 100 of the largest non-financial companies listed on the Nasdaq market, and includes many companies that are at the forefront of the new economy.

With its strong focus on technology, NDQ provides diversified exposure to a high-growth potential sector that is under-represented in the Australian sharemarket.

It could be an ideal choice for investors looking to access the dynamic tech sector in the US. 

The fund has risen more than 12% year to date. 

Vanguard Msci Index International Shares ETF (ASX: VGS)

This ASX ETF from Vanguard is another popular choice amongst investors looking to target international stocks. 

It includes roughly 1,300 companies from developed countries, excluding Australia.

The fund provides exposure to many of the world’s largest companies listed in major developed countries. 

It has provided annual returns of over 10% for the last 5 years. 

Vanguard All-World ex-US Shares Index ETF (ASX: VEU)

Another option for investors looking to diversify away from Australian and US stocks is this fund from Vanguard. 

The ETF provides exposure to many of the world’s largest companies listed in major developed and emerging countries outside the US.

It offers instant diversification with over 3,000 equities in a single trade. 

Over the last 5 years, it has provided annualised returns of approximately 10%. 

The post 3 ASX ETFs to diversify away from a flat Aussie market appeared first on The Motley Fool Australia.

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• 3 reasons why this ASX ETF could be an incredible buy-and-hold forever idea
• Why NDQ and these ASX ETFs could be buys in June
• Top 10 ASX shares bought and sold by investors in May
• 3 incredible ASX ETFs for Australian investors in June
• Can you get rich by investing $5,000 a year into ASX shares?

Motley Fool contributor Aaron Bell has positions in BetaShares Nasdaq 100 ETF and Vanguard Msci Index International Shares ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended BetaShares Nasdaq 100 ETF and Vanguard International Equity Index Funds – Vanguard Ftse All-World ex-US ETF. The Motley Fool Australia has positions in and has recommended BetaShares Nasdaq 100 ETF. The Motley Fool Australia has recommended Vanguard Msci Index International Shares ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The ASX-listed exchange-traded fund (ETF) Vanguard MSCI Index International Shares ETF (ASX: VGS) could be one of the best investments an Australian can buy for the ultra-long-term.

There are plenty of investments that an Australian could choose, but this offering from Vanguard has so many useful characteristics that it could be one of the very best ASX ETFs.

When I say it could be good for the long term, I’m thinking decades ahead. Let’s look at what makes it so compelling.

Global diversification

The ASX ETF’s investment strategy is to invest in a global portfolio of businesses from across numerous economically developed countries.

Some of the other most popular funds on the ASX are just focused on Australian shares or US shares. The global share market is an excellent place to invest, giving access to the biggest names from various countries, such as the US, Japan, the UK, Canada, France, Switzerland, and Germany.

By investing in such a widespread way, the fund helps lower risks while giving exposure to a lot of great businesses.

At the end of April 2026, the VGS ETF had 1,275 holdings. As time goes on, the holdings will change, allowing it to benefit from the rise of the latest winners. For example, the ASX ETF’s portfolio has benefited from the huge rise in the share price.

Impressive businesses

No returns are guaranteed, but I think the VGS ETF has a number of financial metrics that can help spur returns for investors.

For example, its portfolio’s earnings growth rate was reported in April 2026 as 21.3%. Growing profit is a key factor in supporting share prices, so it’s pleasing to see that level of progress. Over the long term, earnings growth may be the most important driver of success.

The return on equity (ROE) is a helpful measure showing how much money these businesses make on retained shareholder money, and it may also imply what sort of return additional retained profit could make. The ROE was 19.7% as of April 2026.

The biggest positions in the portfolio include names like Nvidia, Alphabet, Apple, Microsoft, Amazon, and Meta Platforms.

Low fees

One of the biggest contributors to how well an ASX ETF performs is the scale of its fees. The lower the fees, the better, because that’s leaving more of the money in the hands of the investor and more for compounding.

The VGS ETF has an annual management fee of 0.18%, which I’d describe as one of the lowest on the ASX for a globally-diversified portfolio.

All of the above helped the fund deliver an annual net return per year of around 13.5% per year, which I’d describe as a wonderful rate of compounding and can help wealth-building. Past performance is not a guarantee of future returns of course, but I think it can continue performing very well.

The post 3 reasons why this ASX ETF could be an incredible buy-and-hold forever idea appeared first on The Motley Fool Australia.

More reading

• 3 ASX ETFs to diversify away from a flat Aussie market
• Top 10 ASX shares bought and sold by investors in May
• Can you get rich by investing $5,000 a year into ASX shares?
• 3 top ASX ETFs for Gen Z investors to buy
• How to become a millionaire on a $70,000 salary

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 Alphabet, Amazon, Apple, Meta Platforms, Microsoft, and Nvidia. The Motley Fool Australia has recommended Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Vanguard Msci Index International Shares ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Australians love property.

Property is tangible, familiar, and for the past three decades it has delivered extraordinary returns in most capital cities.

But is it actually the best way to build retirement wealth?

When you run the numbers carefully, the answer for most Australians is probably not.

Combining superannuation and ASX shares, particularly fully franked dividend payers, builds wealth in ways that property simply cannot replicate at the same tax efficiency or cost.

The super advantage most investors underestimate

Superannuation is a tax-privileged structure that dramatically accelerates wealth compounding over time.

Earnings inside super are taxed at just 15% during the accumulation phase, compared to your marginal tax rate outside super.

In retirement, superannuation earnings become completely tax-free.

Compare that to an investment property, where rental income is taxed at your marginal rate and capital gains are taxed at up to 24.5% after the CGT discount.

Furthermore, from 1 July 2026, payday super requires employers to pay superannuation contributions at the same time as wages. This means every pay cycle immediately compounds inside this tax-advantaged structure.

The power of that compounding, at a lower tax rate, over a 30 to 40-year career can be extraordinary.

Why ASX shares inside super compound so effectively

Fully franked ASX dividends inside superannuation are particularly powerful.

The 30% franking credit attached to a fully franked dividend from a stock like Commonwealth Bank of Australia (ASX: CBA) or Wesfarmers Ltd (ASX: WES) is essentially a tax refund from the ATO.

Inside super, where the tax rate on earnings is 15%, the fund receives a 15% net tax credit on top of the dividend itself.

That effective yield boost is unavailable to property investors, who instead pay income tax on rental receipts.

Furthermore, the ASX 200 has returned 8.53% per annum including dividends since inception.

This figure, inside a superannuation structure with 15% earnings tax and franking credit refunds, translates to an after-tax return that few property markets can match after accounting for stamp duty, agent fees, body corporate fees, maintenance, and periods of vacancy.

The property argument is not without merit

Property does offer leverage that shares inside super generally do not.

A $200,000 deposit on a $1,000,000 property gives five times leverage, which can dramatically amplify returns in rising markets.

However, that same leverage amplifies losses in falling markets, adds interest rate sensitivity, and creates cash flow risk through vacant periods.

The RBA’s three rate hikes in 2026 alone have materially increased mortgage costs for millions of Australian property investors. These events have demonstrated exactly how quickly leveraged property can shift from asset to liability.

The importance of the 30 June deadline

The concessional contributions cap, including employer contributions, currently sits at $30,000 for FY2026. Amounts not contributed by 30 June cannot be carried forward without satisfying the unused cap conditions.

For investors who are below that cap, topping up superannuation with additional salary sacrifice contributions before 30 June can be a very tax efficient decision.

Every dollar contributed to super at 15% concessional tax rather than at a marginal rate of 32.5% or higher is a permanent and compounding tax saving.

Foolish takeaway

Property has made many Australians wealthy and may continue to do so.

But the combination of superannuation’s tax advantages and the long-term compounding power of fully franked ASX shares is a wealth-building combination that most Australians underutilise.

For investors willing to maximise their super contributions and hold quality ASX dividend shares inside that structure, the retirement wealth outcome over 20 to 30 years is likely to be more optimal than most property strategies, with less complexity, lower costs, and no 2:00am phone calls about leaking taps.

The post How combining superannuation and ASX shares can set you up for retirement better than property appeared first on The Motley Fool Australia.

More reading

• Why the RBA’s next move could be the most important event for ASX shares in 2026
• Is this ASX financials stock a better buy than CBA shares?
• How much is needed in superannuation to target a $9,000 monthly passive income?
• 5 years ago, $10,000 bought 181 Wesfarmers shares. But how many would it buy now?
• Australia’s minimum wage just rose 4.75%. Here is what it means for ASX consumer stocks

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 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.