Category: Stock Market

While interest rates are expected to edge higher this year, it could be some time before term deposits are once again looking attractive for income-focused investors.

And although they offer certainty, the returns are often eroded by inflation, meaning your purchasing power can quietly go backwards.

That’s why many investors turn to ASX dividend shares instead.

But which shares could be good alternatives? Let’s take a look at three that could form part of a balanced income portfolio:

Amcor plc (ASX: AMC)

Amcor is one of the world’s largest packaging companies, supplying flexible and rigid packaging solutions to consumer staples, healthcare, and beverage businesses across the globe. Its products are used every day, which gives the company highly defensive earnings characteristics.

This stability underpins Amcor’s ability to pay consistent dividends through economic cycles. Demand for packaging doesn’t disappear in a downturn, and long-term contracts with major global customers help smooth cash flows. The recent merger with Berry has created a juggernaut in the industry, positioning it for growth over the remainder of the decade.

Consensus estimates show that the market expects dividend yields of 6.1% in FY 2026 and then 6.3% in FY 2027.

Harvey Norman Holdings Ltd (ASX: HVN)

Harvey Norman is of course one of Australia’s largest retailers with a growing global store network. In addition to its retail operations, the company owns a valuable property portfolio, which adds another layer of income stability.

While retail can be cyclical, Harvey Norman has a long history of outperforming and rewarding its shareholders with attractive dividends. This was no exception in FY 2025, with Harvey Norman delivering results despite many retailers struggling.

The market expects this trend to continue and is forecasting fully franked dividend yields of 4.5% in FY 2026 and 5.1% in FY 2027.

The Lottery Corporation Ltd (ASX: TLC)

Finally, The Lottery Corporation could be an ASX dividend stock to buy. It is a pure-play lotteries business with exclusive long-term licences across Australia. This gives it a rare combination of predictable revenue, limited competition, and high margins.

Lottery ticket sales tend to be resilient regardless of economic conditions, making The Lottery Corporation’s cash flows highly dependable. That reliability supports consistent dividend payments, which are particularly attractive for conservative income investors. Unlike term deposits, it also offers the possibility of dividend growth over time as jackpots increase and digital sales expand.

The consensus estimate shows that the market expects dividend yields of 3.5% in FY 2025 and then 4% in FY 2026.

The post Forget term deposits and buy these ASX dividend shares appeared first on The Motley Fool Australia.

More reading

• How I’d build a $1,000-a-month passive income from ASX shares
• Why Bellevue Gold, Harvey Norman, Karoon Energy, and Westpac shares are falling today
• 2 quality ASX 200 shares to buy now amid a rising Aussie dollar
• 5 ASX dividend shares to buy in January
• Buy, hold, sell: Amcor, ANZ, and Macquarie shares

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 The Lottery Corporation. The Motley Fool Australia has positions in and has recommended Amcor Plc and Harvey Norman. The Motley Fool Australia has recommended The Lottery Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

These 2 ASX growth shares have been under pressure in the past 6 months. If you’re hunting for ASX 200 stocks with genuine growth potential beyond 2026, Lendlease Group (ASX: LLC) and Temple & Webster Group Ltd (ASX: TPW) deserve close attention.

One is quietly reshaping its future in property and development, while the other is quietly reshaping the online retail landscape.

Despite recent share price volatility, both companies have the potential to become long-term leaders in their respective sectors.

Let’s take a closer look.

Lendlease Group

Lendlease has experienced a complex 2025 with the share price losing 20% ground. While the ASX 200 stock has lagged the broader market, the company has undergone a significant operational turnaround.

Management exited international construction operations, simplified the business, returned to profitability, and lifted distributions. Despite these improvements, macroeconomic headwinds have weighed on investor sentiment and the share price.

Yet in property, turning the corner matters and Lendlease appears to be doing exactly that.

FY25 marked a return to profit, alongside sharply higher distributions, signalling improving fundamentals. A strong development pipeline, disciplined capital recycling, and ongoing cost-saving initiatives position the business for its next phase of growth.

At the current share price of $5.05, analysts see meaningful upside. The average 12-month price target sits at $6.30, implying a potential gain of 25% from current levels.

Temple & Webster Group

Temple & Webster is Australia’s leading online furniture and homewares retailer. The ASX growth share is built on a simple but powerful idea: enabling customers to furnish their homes without ever setting foot in a store.

More than just selling couches and lamps, the company is capturing market share in a category still shifting from bricks-and-mortar to online.

At the time of writing, Temple & Webster shares are trading at $12.78, rising 1.8% yesterday. However, zooming out reveals a different picture. The ASX 200 stock is down 42% over the past six months.

That pullback followed a sharp correction in late November, after a trading update showed sales growth had moderated following a blistering run earlier in the year. While the short-term reaction was severe, the longer-term fundamentals remain compelling.

In FY25, Temple & Webster returned to profitability after heavy losses in FY24. Revenue climbed more than 20%, net profit improved significantly, and the business remained debt-free with a strong cash position.

Importantly, active customers reached record levels — a key sign of brand strength and sticky demand.

The broker community has taken notice. Most analysts rate the stock a buy or a strong buy, with an average 12-month price target of $20.42, implying 60% upside. The most bullish forecasts suggest potential upside of more than 118%.

The post 2 ASX growth shares to snap up while they’re still down appeared first on The Motley Fool Australia.

More reading

• 2 shares to buy hand over fist before the ASX 200 soars higher in 2026
• 5 unbeatable ASX stocks I’m eager to buy in 2026
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• Where I’d invest $10,000 in 2026 in ASX shares aiming to beat the market
• Two ASX real estate stocks to watch in 2026

Motley Fool contributor Marc Van Dinther 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 Temple & Webster Group. The Motley Fool Australia has recommended Temple & Webster Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

There are many indexes used by investors to track the performance of different markets and sectors. 

Here in Australia, the S&P/ASX 200 Index (ASX: XJO) acts as the benchmark for the Australian stock market. 

It represents the largest 200 companies by market capitalisation.

Additionally, other important indexes we often compare it to are the S&P 500 Index (SP: .INX) or the NASDAQ-100 Index (NASDAQ: NDX). 

Generally, these are used as benchmarks in the US. 

Many investors use ASX ETFs to track the returns of these markets. 

If you want to track the ASX 200 here in Australia, you could invest in the BetaShares Australia 200 ETF (ASX: A200) or the iShares Core S&P/ASX 200 ETF (ASX: IOZ). 

These are great options to add to your portfolio for instant diversification.

But there are many more indexes, focussed on not just the biggest companies in Australia or globally. 

One making headlines at the moment is the Russell 2000 RIC Capped Index. 

What is the Russell 2000 index?

The Russell 2000 Index provides exposure to approximately 2,000 small-cap companies across various sectors. To clarify, these companies are almost all in the US. 

Ultimately, the benefit of tracking an index like this is having diversified access to early stage innovators.

This is because growth can be faster in early stage companies compared to blue-chip stocks.

In a report from Global X, Senior Investment Strategist Billy Leung explained how earnings growth can differ based on the size of a company. 

Large caps, particularly those dominating the S&P 500, are typically mature, globally exposed, and already operating at scale. Their earnings growth is often steadier, but materially harder to accelerate once expectations are high.

Boosted performance

It’s been well documented that small-caps are enjoying a resurgence recently.

Here in Australia, ASX small-cap shares outperformed the larger players by almost 2.5 times last year, according to S&P Global data.

Looking to the US, Global X’s recent report sheds light on how economic conditions are resembling previous periods of success for the Russell 2000 index. 

The Russell 2000 opportunity into 2026 is best understood as an earnings-led regime rather than a tactical rate-cut trade. History suggests that when relative earnings growth shifts decisively in favour of small caps, performance tends to follow, even without multiple expansion or aggressive margin recovery assumptions.

How to gain exposure

One option for investors looking to gain exposure to this index, or more generally, US small-cap stocks, is the The Global X Russell 2000 ETF (ASX: RSSL). 

It aims to track the performance of the Russell 2000 index. 

Ultimately, it enables investors to capture high-growth opportunities in early-stage companies and it is already catching economic tailwinds. 

Just yesterday, the fund rose an impressive 3%.

Furthermore, in the last 6 months, it’s up more than 12%.

Comparatively, this has outpaced both the ASX 200 and S&P 500 over this period.

The post What is the Russell 2000 Index and why has it been booming over the past 6 months? appeared first on The Motley Fool Australia.

More reading

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• Here are the top 10 ASX 200 shares today
• 10 best ASX 200 large-cap shares of 2025
• Ansell announces CEO transition: Nathalie Ahlström to succeed Neil Salmon in 2026
• Ramelius Resources reports steady gold output; FY26 guidance reaffirmed

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 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.

On Thursday, the S&P/ASX 200 Index (ASX: XJO) had a positive session and pushed higher. The benchmark index rose 0.3% to 8,720.8 points.

Will the market be able to build on this on Friday and end the week on a high? Here are five things to watch:

ASX 200 expected to rise

The Australian share market looks set to rise on Friday despite a mixed night in the United States. According to the latest SPI futures, the ASX 200 is expected to open 23 points or 0.25% higher this morning. In late trade on Wall Street, the Dow Jones is up 0.5%, but the S&P 500 is down 0.1% and the Nasdaq is down 0.7%.

Oil prices jump

It could be a good finish to the week for ASX 200 energy shares Santos Ltd (ASX: STO) and Woodside Energy Group Ltd (ASX: WDS) after oil prices jumped overnight. According to Bloomberg, the WTI crude oil price is up 3.9% to US$58.15 a barrel and the Brent crude oil price is up 4.1% to US$62.41 a barrel. This was driven by supply worries in Russia, Iraq, and Iran.

DroneShield shares on watch

DroneShield Ltd (ASX: DRO) shares will be on watch on Friday after US defence stocks surged overnight. The catalyst for this was news that Donald Trump is aiming for a US$1.5 trillion defence budget by 2027. On TruthSocial, he wrote: “After the long and difficult negotiations with Senators, Congressmen, Secretaries, and other Political Representatives, I have determined that, for the Good of our Country, especially in these very troubled and dangerous times, our Military Budget for the year 2027 should not be $1 Trillion Dollars, rather $1.5 Trillion Dollars.”

Gold price softens

ASX 200 gold shares Evolution Mining Ltd (ASX: EVN) and Newmont Corporation (ASX: NEM) could have a subdued finish to the week after the gold price edged lower overnight. According to CNBC, the gold futures price is down 0.05% to US$4,459.8 an ounce. The precious metal eased ahead of the release of US jobs data.

Northern Star update

Northern Star Resources Ltd (ASX: NST) shares will be on watch today after the gold miner responded to a query from the Australian stock exchange. When quizzed about its lack of cost guidance, it said: “[A]ny impact on annual cost guidance is not yet known to NST because the Company requires further, more complete information (that is not yet available to it) and to make further, reasonable enquiries of operational drivers to form a reasonably certain view of that impact and its materiality.”

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

More reading

• What is the Russell 2000 Index and why has it been booming over the past 6 months?
• Oil prices bounce after sharp sell off. Is the worst finally over?
• Here are the top 10 ASX 200 shares today
• 10 best ASX 200 large-cap shares of 2025
• Which ASX 200 market sectors delivered the best dividend yields in 2025?

Motley Fool contributor James Mickleboro has positions in Woodside Energy Group. 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.

Oil prices have finally bounced after a sharp two-day decline, giving some relief to energy markets.

West Texas Intermediate (WTI) crude has climbed back above roughly US$56 a barrel, while Brent crude is trading near US$60 a barrel as traders reassess recent news around global supply and demand.

The initial concern was that extra Venezuelan output might add to global oil supply and push prices lower. However, buyers have now stepped back in after that quick drop.

While the rebound is encouraging, it is important to keep the wider picture in mind. Oil prices are still down heavily over the past 12 months, falling more than 20% over that period. The longer-term trend has clearly been lower, with prices making a series of lower highs and lower lows throughout most of the year.

From a technical point of view, oil is now sitting near an important support level. This is an area where buyers have previously shown interest, which helps explain the recent bounce. Short term indicators have turned positive, but the overall trend remains weak unless prices can break above key resistance levels in the months ahead.

What this means for ASX energy stocks

On the ASX, weaker oil prices over the past year have weighed on local energy shares. Major producers such as Woodside Energy Group Ltd (ASX: WDS) and Santos Ltd (ASX: STO) have felt that pressure.

On Thursday, Woodside closed at around $22.95, reflecting how much the stock has drifted lower from its earlier highs. The company remains Australia’s largest independent oil and gas producer, but its share price has fallen as investors focus on the risk of weaker earnings if oil stays low.

Santos closed at about $5.94 on Thursday, also lower than past levels. Santos has a mix of oil and gas assets, and its share price has been sensitive to changes in energy prices and market confidence.

It is worth remembering that energy stocks often move more than the oil price itself. When oil falls, investor expectations for future earnings get cut quickly. When oil rebounds, sentiment can improve just as fast.

Foolish bottom line

Oil’s recent bounce offers some short-term relief, but it does not yet change the bigger picture. Prices remain in a longer-term downtrend, which continues to weigh on ASX energy stocks.

For investors, the next key test will be whether oil can hold above the current support level and push higher from here. Until then, many traders and long-term holders are likely to stay cautious.

The post Oil prices bounce after sharp sell off. Is the worst finally over? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Friday
• 5 things to watch on the ASX 200 on Thursday
• Santos vs Woodside: Are these ASX 200 oil and gas shares a buy, hold or sell for 2026?
• 5 things to watch on the ASX 200 on Wednesday
• Buying ASX energy shares like Woodside and Santos? Here’s why Venezuela matters

Motley Fool contributor Aaron Teboneras 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.

The ASX 200 materials sector was the best performer last year, delivering a total return, including dividends, of 36.21%.

Soaring commodity prices pushed ASX mining shares substantially higher last year.

In the first week of 2026, many have reset their 52-week highs yet again as metal and mineral prices continue their upwards march.

The big ones to watch are gold, silver, copper, and lithium, which have booked 12-month gains of 66%, 160%, 36%, and 77%, respectively.

Wilson Asset Management lead portfolio manager Matthew Haupt expects ASX mining shares to do better than the banks in 2026.

Haupt is positive on ASX iron ore shares BHP Group Ltd (ASX: BHP), Fortescue Ltd (ASX: FMG), and Rio Tinto Ltd (ASX: RIO) this year.

He said Wilson recently bought aluminium stock Alcoa Corporation CDI (ASX: AAI) and coal producer Whitehaven Coal Ltd (ASX: WHC).

After such strong share price growth in 2025, investors may be wary of how much upside might be left in ASX mining shares.

Here are four miners that the experts are backing for price growth in the new year.

Chalice Mining Ltd (ASX: CHN)

Chalice is an ASX mineral explorer targeting high-grade nickel, copper, gold, and platinum group element (PGE) deposits.

PGE includes platinum (PT), palladium (PD), and rhodium (RH), which were among the fastest rising commodities of 2025.

Chalice Mining shares closed at $2.56 on Thursday, up 7.1% for the day and up 123% over the past 12 months.

Morgans has a speculative buy rating on this ASX mining share with a $4.50 price target.

This suggests a potential 76% upside in the new year.

Morgans said:

CHN released a Pre-Feasibility Study (PFS) for the Gonneville Pd-Ni-Cu project. The PFS was broadly in line with MorgansF, with key beats to Stage 1 capex (-9%) and palladium payabilities (+7%).

Macro tailwinds are turning supportive: the EU is moving to soften its 2035 ICE ban (supportive for hybrids/Pd demand) while the already small ~9Mozpa palladium market is tightening, running an estimated ~0.2Moz deficit even before any meaningful industrial demand uplift.

Vault Minerals Ltd (ASX: VAU)

The Vault Minerals share price closed at $5.61, down 1.75% on Thursday and up 154% over the past 12 months.

Like all ASX gold mining shares, Vault Minerals has benefited from the skyrocketing gold price.

The gold price rose by 65% in 2025 and by 27% in 2024.

UBS gives Vault Minerals a buy rating with a 12-month price target of $6.60.

This implies a potential 18% gain in 2026.

Westgold Resources Ltd (ASX: WGX) 

The Westgold Resources share price finished the session yesterday at $6.31, down 1.6%.

The ASX gold mining share has rocketed 115% over the past 12 months.

RBC Capital Markets reckons Westgold shares have more room to run.

The broker gives the stock a buy rating with a price target of $7.80.

This implies a possible 24% gain in 2026.

Capstone Copper Corp CDI (ASX: CSC)

The Capstone Copper share price closed at $14.99 yesterday, down 2.5%.

This ASX copper share has risen 48% over the past 12 months.

Macquarie has a buy rating on Capstone Copper shares with a 12-month price target of $17.

This implies a potential 13% gain in the new year.

The broker said Capstone is its preferred copper exposure due to its “strong organic growth profile and attractive relative value”.

The post 4 ASX shares to buy in the market’s best-performing sector of 2025 appeared first on The Motley Fool Australia.

More reading

• This ASX mining stock is up 120% in a year. Can the rally continue?
• Buy, hold, sell: How does Morgans rate these ASX shares?
• Here are the top 10 ASX 200 shares today
• Scores of ASX mining shares hit 52-week highs
• With the copper price hitting a new record, how can you get exposure?

Motley Fool contributor Bronwyn Allen has positions in Alcoa and BHP Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. 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, we examined the pros and cons of buying the ASX’s most popular exchange-traded fund (ETF) – the Vanguard Australian Shares Index ETF (ASX: VAS). Today, I thought we’d do the same with another popular fund amongst Australian investors, the iShares S&P 500 ETF (ASX: IVV).

This product is the only fund on the ASX that offers direct exposure to the S&P 500 Index (SP: .INX). This index, representing the largest 500 publicly traded American stocks, is the most widely tracked in the world. As such, this ASX-listed vehicle is a go-to choice for Australian investors seeking some exposure to the American economy.

Let’s discuss two reasons why Australian investors might wish to buy into the iShares S&P 500 ETF in 2026, as well as two reasons they might wish to reconsider.

Two reasons to buy the iShares S&P 500 ETF today

IVV has the best stocks in the world

Firstly, the S&P 500 is quite simply home to many, if not most, of the world’s best businesses. The ASX is home to some great companies. But none can match the global dominance and scale of names like Coca-Cola, Visa, Costco, Apple, Microsoft, Nvidia, Netflix, and hundreds of other top stocks.

These companies are well-known around the world and have long histories of delivering monstrous profits to their investors. The ASX’s IVV ETF is an easy way to gain exposure to all of them, as well as many more.

Warren Buffett recommends the S&P 500

Legendary investor Warren Buffett has recommended a simple S&P 500 index fund for most investors for years, calling it a ‘slice of America’. Buffett has often argued that even most professional investors often struggle to outperform the S&P 500 over long time frames.

As such, he argues that investing in an S&P 500 ETF, such as the ASX’s IVV, is a no-brainer for most ordinary investors like you and me. He once said that if an investor buys the fund and “invests through thick and thin, and especially through thin”, they will build meaningful wealth.

Why might investors want to avoid IVV in 2026?

So if even Warren Buffett is telling us to buy the S&P 500, why might investors not want a slice of the ASX’s IVV ETF in 2026?

Well, here are two reasons why investors may wish to reconsider the iShares S&P 500 ETF today.

Tech, tech and more tech

Despite holding 500 individual stocks within its portfolio, the iShares S&P 500 is not what you would call diversified. It’s no secret that the ‘Magnificent 7’ tech stocks now dominate this index to an extent rarely seen in American history. Sure, these stocks have produced extraordinary returns over the past decade. But this has resulted in them occupying a huge role in the S&P 500 as it stands in early 2026. The Magnificent 7, together with the myriad of other leading tech companies that the US hosts, means that just over 34% of the S&P 500’s weighted portfolio goes towards tech companies.

Coincidentally, 34.1% of the S&P 500 is also represented by the Magnificent 7 alone (Amazon, Alphabet, Tesla, and Meta Platforms aren’t officially tech stocks).

If you aren’t comfortable with this level of tech exposure, IVV might not be the right ASX ETF for you.

A bet on America

As we touched on earlier, Warren Buffett calls the S&P 500 a ‘slice of America’ and buying it a ‘bet on America’. That might not sound too appealing to many investors right now. To be fair, Warren Buffett has long told the world not to bet against the United States, citing its 250 years of capitalistic innovation. He stands firm in that faith today.

But it may be hard for other investors to share that faith. The United States remains the largest and most dominant economy in the world. But it is not without its problems. Government debt is ballooning, with no sign of slowing. America is politically and socially riven with division. And the current administration is pursuing economic policies (tariffs in particular) that many economists argue are counterproductive.

If you aren’t certain that the United States is on a prosperous path as it stands in early 2026, buying a ‘bet on America’ might not align with your own investing preferences.

The post 4 pros and cons of buying the iShares S&P 500 ETF (IVV) in 2026! appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has positions in Alphabet, Amazon, Apple, Berkshire Hathaway, Coca-Cola, Costco Wholesale, Meta Platforms, Microsoft, Netflix, Vanguard Australian Shares Index ETF, and Visa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Amazon, Apple, Berkshire Hathaway, Costco Wholesale, Meta Platforms, Microsoft, Netflix, Nvidia, Tesla, Visa, and iShares S&P 500 ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has recommended Alphabet, Amazon, Apple, Berkshire Hathaway, Meta Platforms, Microsoft, Netflix, Nvidia, Visa, and iShares S&P 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Sometimes the best income opportunities don’t come from exciting stories or bold forecasts. They come from boring assets doing exactly what they are supposed to do.

That’s how I feel about HomeCo Daily Needs REIT (ASX: HDN) right now.

At a share price of $1.36 at the time of writing, and FY26 distribution guidance of 8.6 cents per unit, this ASX real estate investment trust (REIT) is offering a forward dividend yield of over 6%, before any potential benefit from valuation upside. 

For a REIT with defensive tenants, high occupancy, and growing earnings, that immediately gets my attention.

A portfolio built for everyday life

What I like most about HomeCo Daily Needs REIT is its practical portfolio.

The REIT focuses on convenience-based retail and services that people use regardless of economic conditions. This includes neighbourhood retail centres, large format retail, and health and service assets located in metropolitan growth corridors. These are properties anchored by tenants such as supermarkets, hardware stores, healthcare providers, and essential services.

Its three largest tenants include Coles Group Ltd (ASX: COL), Woolworths Group Ltd (ASX: WOW), and Bunnings and Kmart owner Wesfarmers Ltd (ASX: WES).

This focus shows up clearly in the numbers. Occupancy has remained above 99% since its IPO, and cash rent collection has also stayed above 99%. That consistency matters a lot when you are relying on distributions to fund retirement or supplement income.

In a world where discretionary spending can swing wildly, HomeCo Daily Needs REIT’s exposure to daily needs provides a level of earnings stability that many REITs simply don’t have.

Solid earnings and growing distributions

The FY25 result confirmed why I’m comfortable with this REIT.

Funds from operations (FFO) came in at 8.8 cents per unit, in line with guidance, while distributions reached 8.5 cents per unit. More importantly, management has guided to FY26 FFO of 9 cents per unit and FY26 distributions of 8.6 cents per unit.

That may not sound dramatic, but modest growth combined with reliability is exactly what I want from an income REIT. I am far more interested in sustainability than in stretching for yield.

At today’s share price, investors are being paid well to wait, with the prospect of gradual distribution growth layered on top.

Balance sheet strength and valuation upside

Another reason I would be comfortable owning this ASX REIT is its balance sheet.

Gearing sits around 35%, right in the middle of the target range. The trust has also actively managed its debt, recently refinancing $810 million of facilities out to 2028 at improved margins. Around 70% of debt is hedged until December 2026, which provides a degree of protection if rates remain higher for longer.

What really stood out to me recently was the valuation update from last month. As at December 2025, the trust recorded $219 million in gross valuation gains, driven by strong net operating income growth and slight cap rate tightening. This marked the fourth consecutive period of positive revaluations.

That tells me two things. First, the assets are performing operationally. Second, investor demand for high-quality daily needs property remains strong.

Why I think HomeCo Daily Needs REIT is a top buy for 2026

I’m not buying HomeCo Daily Needs REIT because I expect explosive growth. I’m buying it because it does the basics exceptionally well.

It owns assets that people rely on every day. It leases them to high-quality tenants. It maintains high occupancy. It manages its balance sheet conservatively. And it pays a reliable, growing distribution.

In an environment where income remains valuable and certainty is scarce, that combination is hard to ignore.

For investors seeking to position their portfolio for 2026 with a focus on income, stability, and prudent risk, I believe HomeCo Daily Needs REIT deserves serious consideration.

The post Oh my, this 6% dividend yielding ASX REIT is a top buy for 2026 appeared first on The Motley Fool Australia.

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

It is easy to get caught up in short-term share price moves. But the ASX shares that often deliver the strongest long-term returns are those quietly expanding their addressable markets, deepening customer relationships, and reinvesting to stay ahead of competitors.

With that in mind, let’s now take a look at a couple of ASX growth stocks that could realistically be much larger businesses by 2030 than they are today.

Pro Medicus Ltd (ASX: PME)

Pro Medicus is arguably one of the most impressive growth stories on the Australian share market and it has achieved this by doing one thing exceptionally well.

Its Visage medical imaging platform is increasingly being adopted by large hospital networks, particularly in the United States. Speed, scalability, and reliability are critical in medical imaging, and once the software is embedded into clinical workflows, it becomes very difficult to replace.

The long-term opportunity remains significant. Imaging volumes continue to rise, data sets are becoming larger and more complex, and healthcare providers are battling radiologist shortages and under constant pressure to improve efficiency. All of this plays directly into Pro Medicus’ strengths.

If adoption continues to broaden globally, the business could be servicing a far larger slice of the healthcare system by the end of the decade.

In addition, the company is expanding into other ologies, such as cardiology and pathology, giving it a significant growth runway over the next decade.

Catapult Sports Ltd (ASX: CAT)

Another ASX growth stock that could grow materially in the future is Catapult Sports.

It specialises in wearable tracking technology and performance analytics used by professional sporting teams and organisations around the world. These tools help teams optimise performance, manage workloads, and reduce injury risk, which are areas where marginal gains can have a significant impact.

What makes Catapult particularly interesting over the long term is the size of its opportunity relative to its current scale. The global professional sports technology market is expected to grow strongly through to the end of the decade, as data and analytics become standard tools across more sports and competitions.

As mentioned here, Bell Potter highlights that “the pro sports technology market is currently valued at US$36bn in 2025 and is forecast to double to US$72bn by 2030.” This bodes well for Catapult, especially given how it is a market leader.

As adoption deepens and operating leverage improves, the business has the potential to generate significantly higher earnings than it does today.

The post Why these ASX growth stocks could be much bigger in 2030 than today appeared first on The Motley Fool Australia.

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• Top 5 ASX 200 tech shares for growth in 2025

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

High-conviction investing is not about owning dozens of shares or reacting to every market headline. It is about identifying a small number of exceptional businesses and being willing to back them through market cycles.

This approach requires patience and discipline. It also requires comfort with short-term volatility in exchange for long-term compounding.

Rather than trying to predict what the market will do next, the focus is on what a business could look like many years from now.

Here is how I would go about building a high-conviction ASX share portfolio.

Start with a clear framework

Before choosing any ASX shares, I would define what earns a place in the portfolio.

For me, high-conviction picks tend to share a few characteristics. They operate in markets with long-term growth drivers, they have competitive advantages that are difficult to replicate, and they are run by talented management teams.

Importantly, I would be comfortable owning these businesses even if markets fell sharply in the short term.

Focus on quality

A high-conviction ASX share portfolio should be anchored by businesses with proven quality.

One example could be CSL Ltd (ASX: CSL). It operates in essential healthcare markets, benefits from structural demand growth, and has spent decades building scale, expertise, and intellectual property.

Another is Cochlear Ltd (ASX: COH). Its leadership position, deep clinician relationships, and high switching costs make it the kind of business that can compound steadily over long periods.

These types of companies could form the backbone of a high-conviction ASX share portfolio.

Add scalable growth engines

Once a quality foundation is in place, I would look to add businesses with clear scalability.

TechnologyOne Ltd (ASX: TNE) is a good example. Its mission-critical software, high recurring revenue, and low customer churn provide strong earnings visibility. With international expansion and ongoing product development, the company still appears to have a long growth runway ahead. Management believes it can double in size every five years.

I would also look for exposure to global infrastructure-style growth through businesses like Goodman Group (ASX: GMG). Its development-led model and exposure to logistics and data centres give it leverage to long-term trends such as e-commerce, automation, and digital infrastructure demand.

These businesses could deliver growth without relying on economic perfection.

Keep the ASX share portfolio focused

A high-conviction ASX share portfolio does not need many holdings.

In fact, too much diversification can dilute the impact of great ideas and could lead to diworsification. I would rather own five or six businesses I understand deeply than twenty I barely follow. This also makes it easier to stay invested during periods of volatility, because each holding has a clear long-term role.

Position sizing matters too. No single stock should dominate the portfolio, but the strongest ideas should be allowed to meaningfully contribute to returns.

Foolish takeaway

Building a high-conviction ASX share portfolio is about patience and quality businesses.

By focusing on a small number of shares with competitive advantages, long growth runways, and proven execution, investors can give themselves a better chance of benefiting from long-term compounding.

The post How I’d build a high-conviction ASX share portfolio appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• 3 incredible ASX growth shares to buy and hold forever in 2026
• The ASX 200 stocks I’d be happy to hold until retirement
• How I’d build a $1,000-a-month passive income from ASX shares
• 3 ASX 200 blue-chip shares I would buy with $100,000

Motley Fool contributor James Mickleboro has positions in CSL, Cochlear, Goodman Group, and Technology One. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL, Cochlear, Goodman Group, and Technology One. The Motley Fool Australia has recommended CSL, Cochlear, Goodman Group, and Technology One. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.