Category: Stock Market

Yesterday was a good day for Australian investors.

The April CPI print showed headline inflation slowing to 4.2% annually, below the 4.4% consensus forecast.

The ASX 200 rose 0.69%, helped by rate-sensitive ASX financial stocks.

But before investors get too comfortable, there is a more complicated story buried in the data.

The number that actually matters moved the wrong way

The RBA does not set monetary policy based purely on headline CPI.

It focuses on trimmed mean inflation, which strips out the most volatile price movements to reveal underlying price momentum.

Yesterday’s data showed trimmed mean inflation rising to 3.4% annually, its highest reading since late 2024.

The RBA’s target band is 2% to 3%.

Trimmed mean inflation is not just above that band, but actually rising.

The headline undershoot was driven almost entirely by the government’s temporary fuel excise reduction, which pushed automotive fuel prices lower.

That relief unwinds in July, at which point headline CPI will face direct upward pressure.

According to Westpac’s economics team, trimmed mean inflation is forecast to remain above 3% until end-2027, with the cash rate on hold until 2028 when the RBA is expected to begin cutting.

So why did the market rally?

Markets were bracing for something worse.

March CPI came in at 4.6%, and with oil prices having surged above US$105 per barrel in April, many economists feared a worse outcome.

The April print was a relief relative to those fears, even if it was not good news in absolute terms.

The probability of a June rate hike has now receded to near zero, and that removal of near-term tightening risk was enough to send rate-sensitive stocks sharply higher.

What it means for Commonwealth Bank

For Commonwealth Bank of Australia (ASX: CBA), the inflation picture cuts both ways.

Higher rates for longer support net interest margins, which is good for earnings.

But elevated rates also increase the risk of mortgage stress across CBA’s enormous home loan book.

CBA declared a fully franked interim dividend of $2.35 per share for the first half of FY2026, up 4.4% year-on-year, backed by a 5% lift in statutory net profit to $5.41 billion.

That result was delivered in a high-rate environment, underscoring CBA’s ability to generate strong earnings even when conditions are tight.

The stock trades at approximately 27 times forward earnings, a premium that reflects its quality but leaves little room for disappointment if credit conditions deteriorate.

What it means for Mirvac

For Mirvac Group (ASX: MGR), the implications are more direct.

Property trusts are acutely sensitive to interest rates because higher rates increase borrowing costs and compress asset valuations simultaneously.

The removal of a June hike from market pricing was the primary driver of yesterday’s rally in rate-sensitive ASX financial stocks, and Mirvac was a clear beneficiary.

However, with trimmed mean inflation moving higher and the fuel excise unwind arriving in July, the path to rate cuts remains distant.

If Westpac’s forecast of a late 2027 return to target proves correct, Mirvac and its REIT peers face another eighteen months of elevated rates before meaningful relief arrives.

The good news is that Mirvac is not simply waiting for rates to fall.

Residential sales lifted 38% year on year in the first half of FY2026, and the federal budget’s new-build negative gearing exemption adds a further demand tailwind for its development pipeline.

Foolish takeaway

Yesterday’s inflation news was better than feared, without being great.

The headline number was flattered by a temporary fuel excise cut that disappears in July, and the trimmed mean measure the RBA actually watches moved higher.

For investors in ASX financial stocks like CBA and Mirvac, the removal of a near-term rate hike is welcome news.

But the path to rate cuts remains long, and the inflation fight is far from won.

The post Investors are celebrating yesterday’s inflation news. Here’s how it might impact ASX financial stocks appeared first on The Motley Fool Australia.

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• ASX 200 rises as inflation surprise leaves investors with one big question
• Why ASX, CBA, Endeavour, and Tuas shares are falling today
• How do ASX dividend shares compare to savings deposit rates today?
• CBA shares rebound 7%: Is the banking giant a buy, sell or hold?

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 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.

Here is a fact that would have seemed extraordinary just five years ago.

In the first half of FY 2026, copper earnings at BHP Group Ltd (ASX: BHP) exceeded iron ore contributions for the first time in the company’s history.

Copper now accounts for more than 50% of group earnings.

BHP is no longer primarily an iron ore company.

And that matters enormously for how investors should think about its valuation.

The share price run has been remarkable

BHP shares are up 34% year to date and 58% over the past twelve months.

This has pushed the share’s market cap above $300 billion.

Resultantly, BHP has reclaimed its position as Australia’s largest listed company from Commonwealth Bank.

The run has been driven by copper, which has surged approximately 43% over twelve months to US$13,588 per tonne.

That already exceeds Goldman Sachs’ ambitious 2026 target of US$11,200 per tonne.

Why copper demand is not slowing down

Electric vehicles require significantly more copper per unit than petrol cars.

AI data centres demand up to 50,000 tonnes of copper each for wiring, cooling, and grounding.

Grid infrastructure upgrades globally require enormous new copper investment.

These long-term tailwinds compound year after year, and new copper mines take 15 to 20 years to develop.

Supply simply cannot respond quickly enough to meet what the market needs.

BHP plans to grow copper-equivalent production at 3% to 4% per year through 2035, adding to one of the world’s most valuable copper portfolios at exactly the right moment.

The company also committed more than US$550 million to expand its Olympic Dam copper mine in October 2025, reinforcing that commitment with capital.

Morgan Stanley is still bullish on BHP shares

After a 56% run, the question investors are asking is obvious: Has the easy money been made?

Morgan Stanley does not think so.

The broker carries an overweight recommendation on BHP shares with a price target of $67.50, implying further upside from current levels.

The bull case rests on copper demand outpacing supply for the foreseeable future, iron ore generating the cash flow to fund growth, and the Jansen potash project adding a third major earnings pillar that most analysts have not yet fully priced in.

But what about the risks?

BHP is a commodity company and commodity prices can fall as fast as they rise.

After a 58% gain, the margin of safety is narrower than it was twelve months ago.

A slowdown in Chinese industrial demand remains the key risk to watch.

Investors buying today are paying for a future that still needs to unfold.

Foolish Takeaway

BHP shares are not cheap.

But the company is in the middle of an identity shift, from iron ore giant to copper-led global miner.

That shift is being driven by forces that are measured in decades, not quarters.

For patient investors who can hold through commodity volatility, BHP shares look like they could continue compounding over the long term.

The post Why BHP shares hitting a fresh all-time high could be just the beginning appeared first on The Motley Fool Australia.

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

Yesterday, three ASX shares soared between 7% and 13% higher on positive news. 

For comparison, the S&P/ASX 200 Index (ASX: XJO) rose roughly 0.7%. 

Let’s see what was behind the massive jump and what experts are anticipating moving forward. 

Vista Group International Ltd (ASX: VGL)

Vista Group engages in the sale, support, and associated development of software for the film industry.

Yesterday, its share price shot almost 13% higher on the back of a key announcement.

Vista Group announced that Cinemex has signed a five-year agreement to move its Mexico cinema operations back onto Vista’s software platform. 

The rollout will begin during 2026 and follows the successful transition of Cinemex’s US cinemas to Vista’s systems in 2025. Cinemex is the second-largest cinema operator in Mexico, with more than 2,800 screens across 289 locations.

Speaking on the deal, Vista Group CEO, Stuart Dickinson, said: 

We are delighted to welcome Cinemex back to Vista Group and to empower their team with our market leading solutions, including Vista Cloud’s Digital Empowerment capability.

Following the 13% share price rise, investors may be wondering if there is any more upside for these ASX shares. 

Recent estimates from brokers indicate there is. 

Shaw and Partners recently placed a price target of $3.70 on Vista Group shares. 

That indicates a further 72% upside. 

Austal Ltd (ASX: ASB)

Austal shares soared nearly 8% higher yesterday, rebounding after a tough start to 2026. 

It is an Australian-based shipbuilder that specialises in the design, construction, and support of defence and commercial vessels globally.

It seems investors have woken up to the value in the company after it tumbled more than 30% year to date despite strong contract momentum. 

This ASX defence stock appears to be well positioned to benefit from rising global defence spending, and appears to have plenty more upside. 

It closed yesterday at $4.25 per share, significantly below its yearly high of over $8 per share. 

Broker targets have been placed around $6.94 for this ASX defence stock, indicating a further upside of 63%. 

Megaport Ltd (ASX: MP1)

Megaport shares gained nearly 9% yesterday. It seems investors and brokers have been looking at the software-defined network (SDN) service provider with renewed optimism. 

Catalysts for the rise could be the major contract wins from the company’s newly acquired Latitude.sh business. 

Following yesterday’s gain, Megaport shares closed at $14.98. 

Unfortunately, it appears much of the upside is now priced in for these ASX shares. 

Ord Minnett recently placed a price target of $14.50 on the company, while Morgans has a price target of $15.50. 

The post These ASX shares shot higher this week – can they keep rising? appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
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• Here are the top 10 ASX 200 shares today

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 Megaport and Vista Group International. 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.

The numbers are staggering.

Amazon Web Services will invest $20 billion in Australian data centres by 2029.

Microsoft went further, committing $25 billion to Australian AI and cloud infrastructure.

This is the largest single corporate technology investment in the Australia’s history.

Yet three ASX-listed companies sitting directly in the path of that investment remain surprisingly under-owned by retail investors.

Goodman Group (ASX: GMG)

The data centre story starts with land, power, and location.

Goodman Group controls all three.

The industrial property giant has transformed itself from a logistics warehouse owner into one of the most important data centre developer in the Asia-Pacific region.

Data centres now make up 73% of Goodman’s development pipeline.

This is on track to reach $18 billion by June 2026, up from $14.5 billion at 31 March.

The company has assembled a power bank of 6.4 gigawatts across its global network, a resource that has become extraordinarily difficult to replicate as power access emerges as the key constraint on data centre expansion worldwide.

Morgans this week retained its buy rating on Goodman with a $36 price target, highlighting that its work in progress is expected to be ahead of consensus forecasts at the end of June.

Crucially, Morgans noted that management believes industry data centre capital expenditure requirements likely exceed global capital market funding capacity.

This view points to a sustained period of pricing power for those who already hold secured power, sites, and locked-in capital partners.

Goodman is positioned beautifully here.

NextDC Ltd (ASX: NXT)

If Goodman builds the shells, NextDC Ltd operates what goes inside them.

The company is Australia’s largest independent data centre operator, providing colocation, cloud connectivity, and managed services to enterprises, cloud providers, and government agencies across 14 facilities nationally.

In the first half of FY2026, NextDC reported net revenue growth of 13% to $189.2 million, with contracted utilisation surging 137% to 416.6MW and a forward order book of 296.8MW expected to convert into revenue through to FY2029.

Management guides billing utilisation to grow 2.7 times by FY2027 and 3.4 times by FY2028, underpinned by its existing forward order book of contracted but not yet billed capacity.

NextDC has raised its FY2026 capital expenditure guidance to between $2.7 billion and $3.0 billion, up from $2.4 billion previously.

Contracted utilisation surged 60% to 667MW in the March 2026 quarter alone, driven by massive wins at its S4 Sydney development

A compounded annual growth rate in operating earnings of more than 40% is expected between FY2025 and FY2028 as that contracted capacity converts to revenue.

Dicker Data Ltd (ASX: DDR)

The third name in this list is the least obvious but arguably the most interesting from a valuation standpoint.

Dicker Data is Australia’s largest technology distributor, connecting more than 10,000 reseller partners with leading technology vendors across hardware, software, cybersecurity, and AI infrastructure.

Every data centre that gets built creates demand for the racks, servers, networking equipment, and software licences that Dicker Data distributes.

For the first four months of FY2026, Dicker Data reported gross revenue growth of 13.4% to $1.27 billion and a 45.5% jump in net profit before tax to $47.3 million.

This was driven by elevated data centre refresh and AI infrastructure demand.

Despite that momentum, Dicker Data trades on approximately 20 times earnings.

This is a steep discount to the global technology distribution peer average of 41 times.

As a result, the company pays a fully franked quarterly dividend yielding approximately 4.7%.

Jarden carries a buy rating with an $11.00 price target, implying good upside from current levels.

The risks

None of these three ASX shares are risk-free.

Goodman and NextDC both carry significant capital expenditure commitments and are sensitive to interest rate movements given their asset-heavy models.

Dicker Data operates on thin margins and is exposed to any slowdown in enterprise technology spending.

All three have already run hard in recent years, which limits the margin of safety at current prices.

Foolish takeaway

The data centre boom is happening right now, with $25 billion of committed investment flowing into Australian digital infrastructure over the next five years.

Goodman owns the land and the power, NextDC operates the facilities, and Dicker Data distributes the technology that fills them. For investors who believe AI-driven data centre investment will keep accelerating, all three of these ASX shares deserve serious attention.

The post 3 ASX shares riding the data centre boom that investors keep overlooking appeared first on The Motley Fool Australia.

More reading

• This ASX tech stock could be one of the most overlooked AI infrastructure plays on the market
• 2 of the best ASX 200 shares to buy and hold for 10 years
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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 Amazon, Goodman Group, and Microsoft. The Motley Fool Australia has positions in and has recommended Dicker Data. The Motley Fool Australia has recommended Amazon, Goodman Group, and Microsoft. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

GenusPlus Group Ltd (ASX: GNP) shares have been incredible performers over the past 12 months.

During this time, the ASX stock has risen by a whopping 200%.

But if you thought it was too late to invest, think again!

That’s because Bell Potter believes there’s still plenty more upside for its shares from here.

What is this ASX stock?

GenusPlus Group is an Australian infrastructure services provider specialising in the end-to-end design, construction, and maintenance of electrical transmission networks, substations, battery energy storage systems, and telecommunications infrastructure.

It has just announced a binding agreement to acquire MPC Kinetic (MPK), which is an Australian infrastructure and energy services provider. It primarily operates in the onshore gas, water, and renewable energy sectors.

Bell Potter is positive on the deal and highlights its attractive transaction metrics. It said:

Assuming MPK achieves its maximum earn-out hurdle, GNP will purchase MPK for 5.7x FY27 EBIT (vs Industrial Services peer group average of 13.1x and GNP’s pre-acquisition multiple of 17.7x). GNP’s pro forma leverage is expected to be 0.39x EBITDA (assuming total consideration settled). FY26 EPS(A) accretion is forecast to be 45-53% based on the earn-out limits.

It also highlights that the transaction gives the ASX stock exposure to the attractive Australian domestic gas and LNG markets. It adds:

Strategic rationale: 1) Diversifies GNP’s end-market exposures; 2) provides entry into the attractive Australian domestic gas and LNG markets, which are anticipated to be short supply in the long-term; and 3) MPK’s Civil Balance of Plant (CBOP) services are complementary to GNP’s Electrical Balance of Plant (EBOP) capabilities, enabling GNP to deliver a holistic service offering in the renewable energy sector.

Buy rating

According to the note, the broker has responded to the news by retaining its buy rating on the ASX stock with an improved price target of $12.00 (from $10.50).

Based on its current share price of $10.10, this implies potential upside of approximately 19% over the next 12 months.

And while dividends are expected to be paid over the period, the forecast dividend yield is only a modest 0.6%.

Overall, Bell Potter is a fan of the transaction to acquire MPK and sees upside risk to consensus estimates. It concludes:

The MPK acquisition is strategically compelling. GNP is well positioned to capitalise on rising spend in the onshore gas, renewable energy and water infrastructure sectors. GNP’s NTM PE of 19.2x is undemanding. We continue to see further upside to consensus earnings expectations driven by potential contract awards for large transmission developments and further accretive acquisitions.

The post Up 200%! Is it too late to buy this ASX stock? Bell Potter says it isn’t appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro 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 GenusPlus Group. The Motley Fool Australia has recommended GenusPlus Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Are you hunting big returns? If you are, then it could be worth considering the ASX share in this article.

That’s because if Bell Potter is on the money with its recommendation, it could rise by 180% over the next 12 months.

Which ASX share?

The share that Bell Potter is recommending to clients is Trajan Group Holdings Ltd (ASX: TRJ).

It is a developer and manufacturer of analytical science instruments, devices, and solutions, with a focus on accessing specialist skills and capabilities that improve the analytical workflow of the global life sciences industry.

Bell Potter notes that the ASX share has released a trading update this month, which reveals that earnings are forecast to be lower than originally expected due to currency headwinds. It said:

Due to the strengthening AUD against the USD (c.7%) and EUR (c.8%) since 1H26, TRJ has advised that revenue and nEBITDA are likely to be impacted by c.$4m and c.$2m respectively. Operating conditions seem to be tracking in line with expectations set out at 1H26 result, but translation effects are likely to impact the FY26 result.

The vast majority of TRJ’s sales are generated outside Australia, but COGS are c.50% domiciled outside Australia, which means there is not a natural hedge in TRJ’s operational structure. This gap has been narrowing over several years, but translation effects can still be material to earnings.

It also notes that cost saving initiatives are in progress, including a reduction in its headcount, and a new enterprise resource planning (ERP) platform is being implemented. It adds:

TRJ noted headcount reductions are in progress, achieving c.$0.8m in cost savings in 2H26. Rationalisation of the global footprint is also in progress, particularly in reducing ongoing facility costs in the Connecticut operation. A new ERP program is being implemented in 2H26 to aid in supply chain management and improve efficiency. In this transition phase there is a risk that the timing of CE shipments could be impacted that could affect revenue recognition in 2H26. This is not included in the revenue adjustment advised to the market.

Should you invest?

Despite the disappointing update, Bell Potter remains positive and sees significant value in its shares. This is even after taking an axe to its valuation.

According to the note, the broker has retained its buy rating with a reduced price target of 75 cents (from $1.05). Based on its current share price of 26.5 cents, this implies potential upside of 180% for investors over the next 12 months.

However, the broker has warned that it may take a material improvement in its margins to drive its shares meaningfully higher. It concludes:

Our Target Price has reduced by c.27%. The Target Price reflects a 50 / 50 blend of a DCF valuation and EV/EBITDA multiple. A number of downgrades to estimates over time has instigated an increase in our DCF assumptions with the WACC increased 100bp to 13.5% and the EV / EBITDA multiple reduced from 10x to 7x. We don’t see a change in investor sentiment until TRJ can materially turnaround its margins.

The post Leading broker says this ASX share could rise 180% appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro 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.

Eagers Automotive Ltd (ASX: APE) shares have been on form over the past 12 months.

During this time, the ASX 200 share has risen by a sizeable 33%.

As a comparison, the S&P/ASX 200 Index (ASX: XJO) is up 3.8% over the same period.

Can the auto retailer’s shares continue to rise? Let’s see if Bell Potter rates the company as a buy, hold, or sell.

What is the broker saying?

Bell Potter notes that the company has held its annual general meeting this week and provided a trading update.

The broker was relatively pleased with what the ASX 200 share reported. It said:

Eagers held its AGM today and as usual provided a four month trading update to the end of April. The key points were: 1. Turnover is up c.5% on pcp; 2. Order intake is at record levels and orders taken in the first four months have exceeded deliveries by 29%; and 3. The independent used car businesses of easyauto123 and Carlins have had a record start to the year with PBT up 40% on pcp.

The company also provided an outlook for 1H2026 and said it expects underlying operating PBT for the core business (i.e. Australia and New Zealand) to be “in line with, or slightly ahead of” 1H2025. On top of this there will be two months contribution from CanadaOne Auto and this will result in “a record first half at a consolidated level”. Eagers then also said the outlook for 2H2026 is positive with an expected uplift in deliveries, supported by improved Toyota supply. The second half will also benefit from a full six month contribution from CanadaOne and positions the company “for a record year in 2026”.

The broker has reduced its earnings estimates slightly, due to “a 1-2% reduction in our revenue forecasts and also a modest decrease in our margin assumptions.”

Should you buy this ASX 200 share?

According to the note, the broker has responded to the update by retaining its buy rating on Eagers Automotive shares with a trimmed price target of $28.75.

Based on its current share price of $22.76, this implies potential upside of 26% for investors over the next 12 months.

In addition, a 3.5% dividend yield is expected over the period, boosting the total potential return to almost 30%.

Commenting on its recommendation, Bell Potter said:

There are no changes in the key assumptions we apply in each of the valuations used to determine our target price – 22.5x and 7.5x multiples in the PE ratio and EV/EBITDA and an 8.7% WACC in the DCF. The net result is a 2% decrease in our target price to $28.75 which has been driven by the earnings downgrades. This is still >15% premium to the share price so we maintain our BUY recommendation. Focus now perhaps shifts to vehicle deliveries in May and June – May should be out late next week – given these are two of the biggest months of the year and, as Eagers said, the company generates 20-25% of full year profit in these two months.

The post Does Bell Potter rate this ASX 200 share as a buy, hold, or sell? appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro 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 Eagers Automotive Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The ASX share market is a wonderful place to find investment opportunities that can provide strong levels of passive income in superannuation.

Some businesses can provide investors with a high dividend yield because they have a generous dividend payout ratio. The yield could be high because of pleasing franking credits. Or, the payout could be compelling because the business is priced cheaply.

Let’s look at two investment options that could deliver a very pleasing yield to investors with $25,000.

Rural Funds Group (ASX: RFF)

Some retirees may love the idea of investing in farmland for retirement. But, owning commercial property ourselves can come with a lot of administration and potentially costs. Why not just own a real estate investment trust (REIT) that invests in farmland for us.

It invests in areas like almonds, cattle, macadamias, vineyards and cropping, giving investors various exposure to different, attractive growth areas. Over time, Rural Funds benefits from rental indexation which is either fixed annual increases or the rises are linked to inflation, plus market reviews.

Another positive of Rural Funds is that it has defensive rental earnings, with high-quality and reliable tenants, with a weighted average lease expiry (WALE) of well over a decade.

The business pays a distribution every quarter and this means shareholders are getting regular passive income in superannuation.

I expect the business will pay an annual distribution of something like 11.73 cents (the same as FY26) in FY27. That translates into a forward distribution yield of 5.9%.  

Future Generation Australia Ltd (ASX: FGX)

Future Generation Australia is a listed investment company (LIC) that has a number of positives.

For starters, it donates 1% of its net assets each year to youth-focused charities. Fund managers work for free to enable the business to enable that philanthropy.

The LIC is invested in the funds of a number of different fund managers, meaning Future Generation can provide significant diversification.

Future Generation Australia is able to provide investors with growing dividends because LICs can turn investment profits into dividends.

It has increased its annual dividend per share each year for the last decade, meaning it has provided an excellent level of stability for investors. The annual payout for FY25 was 7.2 cents per share, which translates into a trailing grossed-up dividend yield of 7.7%, including franking credits, at the time of writing. That’s a great yield for superannuation investors wanting passive income, in my opinion.

I think it’s likely the business will increase its annual payout during 2026, so the yield could be even better.

The post How to invest $25,000 for passive income in superannuation? appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in Future Generation Australia and Rural Funds 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 positions in and has recommended Rural Funds Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Getting started in the share market can feel intimidating, but exchange traded funds (ETFs) can make the first step much easier.

They allow investors to buy a ready-made basket of shares in a single trade, which can reduce the pressure of trying to pick the perfect stock.

They can also help beginners spread their money across different markets, sectors, and investment styles from day one.

Here are three ASX ETFs that could be perfect for beginners.

Vanguard Australian Shares Index ETF (ASX: VAS)

The first ASX ETF to look at is the Vanguard Australian Shares Index ETF.

This fund is a simple way to buy a broad slice of corporate Australia. It holds many of the country’s largest listed businesses, including Commonwealth Bank of Australia (ASX: CBA), BHP Group Ltd (ASX: BHP), and Wesfarmers Ltd (ASX: WES).

For beginners, this can be useful because it turns the local market into a single investment. Instead of choosing between banks, miners, retailers, healthcare shares, and property trusts, this ASX ETF provides exposure to all of them.

It also keeps investors connected to familiar companies that shape the Australian economy. That can make it easier to understand what is inside the fund and why it moves.

Vanguard US Total Market Shares Index ETF (ASX: VTS)

Another ASX ETF that could be ideal for beginners is the Vanguard US Total Market Shares Index ETF.

This fund opens the door to the full depth of the US share market. It does not just focus on the largest names. It reaches across large, mid, small, and micro-cap companies, giving investors exposure to thousands of businesses in one trade.

Its holdings include NVIDIA (NASDAQ: NVDA), Apple (NASDAQ: AAPL), and Microsoft (NASDAQ: MSFT). These companies sit at the centre of major global trends, but the fund also captures a much wider set of American businesses.

This breadth is important. The US has produced many of the world’s most successful companies, but future winners will not all come from the same corner of the market.

VanEck Morningstar International Wide Moat ETF (ASX: GOAT)

A third ASX ETF that could be perfect for beginners is the VanEck Morningstar International Wide Moat ETF.

This fund takes a different approach. It looks for global companies that have sustainable competitive advantages and are trading at attractive valuations.

That gives it a stock picker’s flavour inside an ETF structure. Rather than simply buying the biggest companies in the market, it searches for businesses that may be difficult for rivals to disrupt.

Current holdings include Novo Nordisk (CPH: NOVO B), Thales (FRA: CSF), and Nike (NYSE: NKE).

This can be a helpful lesson for beginners. Good investing is not just about chasing growth or buying household names. It is also about owning businesses with staying power and paying attention to price.

The post 3 amazing ASX ETFs that could be perfect for beginners appeared first on The Motley Fool Australia.

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• 3 excellent ASX ETFs that could supercharge your portfolio
• Where to invest $10,000 in ASX ETFs in June
• These are the cheapest ASX ETFs on the Australian market
• How to build a $150,000 ASX share portfolio from scratch

Motley Fool contributor James Mickleboro has positions in Nike. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Apple, Microsoft, Nike, Nvidia, and Wesfarmers. The Motley Fool Australia has recommended Apple, BHP Group, Microsoft, Nike, Nvidia, VanEck Morningstar International Wide Moat ETF, and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Here is a number worth sitting with.

In a year when the ASX 200 rose 7%, Wesfarmers Ltd (ASX: WES) shares fell 9%.

That gap has a lot to do with the stock’s valuation coming back to earth after the it traded at 37 times forward earnings in mid-2025.

Today it trades at around 28.5 times earnings, and Morgans just upgraded it to accumulate.

Here’s why investors should take a closer look at Wesfarmers shares.

The half-year result was strong

Wesfarmers posted NPAT of $1,603 million for the half year ended December 2025, up 9.3% on the prior year.

Free cash flows surged 35.6% to $2,745 million. Bunnings revenue rose 4% to $10.7 billion.

Kmart Group delivered 3.2% growth to $6.4 billion. The interim dividend lifted 7.4% to $1.02 per share, fully franked.

Managing director Rob Scott said:

Wesfarmers’ increase in profit was supported by strong earnings contributions from our largest divisions – Bunnings, Kmart Group and WesCEF.

Sales momentum has continued into the second half, with Bunnings, Officeworks, and Kmart all delivering further growth.

Lithium is turning from a cost to a contributor

Most investors know Wesfarmers for Bunnings and Kmart, yet few know it is also one of Australia’s most significant lithium producers.

In 2019, Wesfarmers paid $776 million to acquire a 50% stake in the Mt Holland lithium project in Western Australia, forming the Covalent Lithium joint venture with Chilean mining giant SQM.

The project includes one of the largest known lithium deposits in the world and a downstream refinery in Kwinana designed to produce battery-grade lithium hydroxide for electric vehicle manufacturers.

For two years, the joint venture drained cash as construction costs mounted.

Now, with lithium prices up approximately 60% year to date in 2026, lithium could substantially contribute to Wesfarmers’ bottom line.  

This asset adds great earnings optionality to a business that already generates enormous cash from its retail divisions.

It is a free call option that few investors are pricing in right now.

What Morgans said

Brokers seem to be equally bullish.

Morgans upgraded Wesfarmers shares to accumulate this week with an $81.10 price target.

The broker said:

WES’s share price has fallen 9% over the past 12 months and 7% over the past 6 months. The stock is now trading on a more reasonable 26.5x FY27F PE compared to a peak one-year forward multiple of ~37x in August 2025. Our target price increases slightly to $81.10 and with a forecast 12-month TSR of 12%, we upgrade our rating to ACCUMULATE. In our view, WES remains a high-quality business with a healthy balance sheet and a proven management team.

The risks

However, Wesfarmers is not immune to a consumer slowdown.

Kmart and Bunnings both rely on Australians spending money at home.

If the RBA’s rate hiking cycle weighs on household budgets more than expected, volumes could soften.

The stock is also not cheap in absolute terms at around 28.5 times earnings.

Foolish takeaway

Wesfarmers shares have rarely been available at a more reasonable price relative to the quality of the business.

Bunnings and Kmart keep growing.

Lithium is starting to contribute, and the stock’s dividend keeps rising.

For long-term investors, the pullback in Wesfarmers shares may look more like an entry point than a warning sign.

The post Why Wesfarmers shares remain the gold standard of ASX retail investing appeared first on The Motley Fool Australia.

More reading

• How much is needed in superannuation to target a $3,000 monthly passive income?
• Why Wesfarmers shares are a retiree’s dream for FY27
• Got $50k of savings? Here’s how I’d turn that into passive income of $10k a year
• How do ASX dividend shares compare to savings deposit rates today?
• Buy, hold, sell: Catapult Sports, Guzman Y Gomez, and Wesfarmers shares

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.