Here at The Motley Fool, we believe in long-term, diversified investing principles. One simple way to follow these principles is with ASX ETFs. 

ASX ETFs offer instant diversification in just one trade. 

However more and more thematic funds are becoming available that allow investors to tap into specific sectors. 

This can be extremely effective when certain areas of the market are undervalued. 

Scooping up an ASX ETF in an undervalued sector can pay off big in the long run when markets correct. 

With that in mind, here are three ASX sectors that have struggled recently, making them a prime value play in the long run. 

Healthcare

Healthcare shares have been hit hard in 2026. 

Here on home soil, the S&P/ASX 200 Health Care Index (ASX:XHJ) is down around 30% for the year to date. 

Many healthcare stocks were previously trading at high valuations after years of strong performance, so investors became less willing to pay premium prices as interest rates stayed elevated. 

Higher rates also pushed investors away from growth-oriented healthcare and biotech companies and toward sectors like banks, mining, and energy. 

Some experts are now suggesting the sell-off may have swung too far to the down side, creating a buy-low opportunity for ASX ETFs focussed on this sector. 

These headwinds have pushed down healthcare shares globally, not just here in Australia. 

Some options for investors optimistic on a global long-term rebound include: 

• BetaShares Global Healthcare ETF – Currency Hedged (ASX: DRUG)
• iShares International Equity ETFs – iShares Global Healthcare ETF (ASX: IXJ)
• Vaneck Vectors Global Health Leaders ETF (ASX: HLTH). 

Technology 

ASX technology shares have also been heavily sold off in 2026. 

The S&P/ASX All Technology Index (ASX: XTX) is down around 20% for the year to date. 

ASX technology shares have been pressured by fears that generative AI could disrupt traditional software business models and reduce the value of existing SaaS platforms. 

Investors have been concerned that AI tools and autonomous agents may replace some software functions, weaken pricing power, and force Australian tech companies to spend heavily just to remain competitive against larger global AI players.

However it appears some momentum is beginning to swing back in favour of tech shares.

Targets from brokers are now swinging back towards the optimistic side. 

For investors confident in a long-term rebound, an ASX ETF to consider is Betashares S&P/ASX Australian Technology ETF (ASX: ATEC), which provides exposure to leading ASX-listed companies in a range of tech-related market segments.

Real estate

Finally, real estate shares have also struggled in 2026. 

The S&P/ASX 200 Real Estate Index (ASX: XRE) has dropped around 10% since the start of the year. 

Headwinds have included higher bond yields and interest rates hurting property valuations and REIT financing costs. 

For investors looking to target this undervalued sector, some ASX ETFs to consider include: 

• VanEck Vectors Australian Property ETF (ASX: MVA)
• Vanguard Australian Property Securities Index ETF (ASX: VAP). 

The post ASX ETFs to target this month that focus on undervalued sectors appeared first on The Motley Fool Australia.

More reading

• 3 amazing ASX ETF for beginners to buy and hold
• 3 ASX ETFs that could outperform the ASX in the next 12 months 
• 3 excellent ASX ETFs to buy and hold for 10 years
• Why this BetaShares ETF could be a strong buy for Aussie investors
• ASX tech shares vs. ATEC ETF: How they fared during sector downturn

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.

Many of Australia’s leading brokers were busy this week updating their financial models and recommendations.

Let’s look closer at ten ASX shares that received buy ratings from them. They are as follows:

Bega Cheese Ltd (ASX: BGA)

Morgan Stanley is bullish on this diversified food company. This week, it initiated coverage on the Vegemite owner’s shares with an overweight rating and $6.70 price target. The Bega Cheese share price ended the week at $5.39.

Catapult Sports Ltd (ASX: CAT)

Bell Potter was pleased with this sports technology company’s FY 2026 results. In response, the broker retained its buy rating with an improved price target of $4.65. This compares to its latest share price of $3.57.

Evolution Mining Ltd (ASX: EVN)

UBS turned positive on this gold miner and upgraded its shares to a buy rating with an improved price target of $14.00. The Evolution Mining share price ended the week at $12.17.

Gentrack Group Ltd (ASX: GTK)

Bell Potter continues to see value in this software provider’s shares. This week, the broker retained its buy rating and $5.70 price target on its shares. This is notably higher than its current share price of $3.18.

Goodman Group (ASX: GMG)

Morgan Stanley put an overweight rating and $36.15 price target on this industrial property company’s shares. This compares to its current share price of $30.28. The broker is feeling positive about Goodman ahead of its quarterly update next week.

Megaport Ltd (ASX: MP1)

Morgans remains positive on this network-as-a-service provider following the announcement of another big contract win for its Latitude business. It has put a buy rating and $15.50 price target on its shares. The Megaport share price ended the week at $13.05.

Qualitas Ltd (ASX: QAL)

The team at Morgans upgraded this real estate investment company’s shares to a buy rating this week with a $3.50 price target. This implies potential upside of 20% from its current share price of $2.92.

Regis Resources Ltd (ASX: RRL)

Macquarie is positive on this gold miner’s merger plans. After looking at the proposal, the broker has retained its outperform rating and $9.50 price target on Regis Resources’ shares. This compares to its current share price of $6.35.

Santos Ltd (ASX: STO)

Citi is bullish on this energy producer and has put a buy rating and $9.00 price target on its shares. The Santos share price ended the week at $8.24.

Temple & Webster Group Ltd (ASX: TPW)

Over at Morgan Stanley, its analysts have also put an overweight rating and reduced price target of $8.00 on this online furniture retailer’s shares. This is notably higher than its current share price of $5.04.

The post 10 ASX shares given buy ratings this week appeared first on The Motley Fool Australia.

More reading

• I’d buy these 3 ASX shares before the next market rally
• How to turn $500 a month into $500,000 with ASX shares
• Thinking about dividend yields? Here’s how much the top 10 ASX 200 shares pay
• Why Catapult Sports, IAG, Telstra, and Tuas shares are falling today
• 2 ASX 200 shares I’d buy for the AI infrastructure boom

Motley Fool contributor James Mickleboro has positions in Goodman Group, Megaport, and Temple & Webster Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Catapult Sports, Gentrack Group, Goodman Group, Megaport, and Temple & Webster Group. The Motley Fool Australia has positions in and has recommended Catapult Sports and Gentrack Group. The Motley Fool Australia has recommended Goodman Group, Qualitas, and Temple & Webster Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

After the recent Federal budget changes to trusts, and negative gearing and capital gains for individuals, superannuation may be the best way to invest for full-time working Australians who want passive income.  

Superannuation has a low tax rate compared to individuals, trusts and companies. Plus, it’s easy to invest for the long-term through the investment vehicle.

It’s important to remember that the net income is an after-tax figure. An Australian working full-time could lose approximately a third of their passive income return to tax.

Therefore, investing in superannuation is a much more appealing prospect compared to other options. Superannuation has a lower tax rate in the accumulation phase than the standard individual tax rates for a full-time earner. In retirement, the tax rate could be 0%.

However, every Australian’s tax position is different, so we’re going to look at targeting a particular income level without mentioning tax any further.

How much is needed in superannuation for $7,500 of monthly passive income

Receiving $7,500 in dividends per month translates into $90,000 per year. I reckon many Australians would love to receive that level of dividends each year without having to do any ongoing work for it.

Australian investors need to decide what investments they want to own and the dividend yield that comes with that.

A portfolio with a dividend yield of 7% can be half the size of a portfolio with a dividend yield of 3.5% and earn the same level of passive income.

For example, if a portfolio were $1.3 million in size, it would generate $91,000 of annual passive income with a 7% dividend yield. If a portfolio had a dividend yield of 3.5%, the portfolio would need to be $2.6 million in size to generate the same level of cash payments.

To generate almost exactly $90,000 of annual passive income with a 7% dividend yield, an investor would need a portfolio size of $1.286 million.

A 5% dividend yield would require a portfolio size of $1.8 million to make $90,000 annually.

A 4% dividend yield would require a portfolio size of $2.25 million.

The types of ASX dividend shares I’d want to buy

If a superannuation investor is targeting mid-to-higher dividend yields, then I’d look at reliable and discounted real estate investment trusts (REITs), growing companies with a generous dividend payout ratio and listed investment companies (LICs) with a good track record of dividends.

Appealing businesses with a dividend yield of around 5% to 6%, in my view, include WCM Quality Global Growth Fund (ASX: WCMQ), Telstra Group Ltd (ASX: TLS), Rural Funds Group (ASX: RFF), Centuria Industrial REIT (ASX: CIP), Australian Foundation Investment Co Ltd (ASX: AFI) and Argo Investments Ltd (ASX: ARG).

Businesses with a higher dividend yield include Future Generation Global Ltd (ASX: FGG), Future Generation Australia Ltd (ASX: FGX), Hearts and Minds Investments Ltd (ASX: HM1), WCM Global Growth Ltd (ASX: WQG), WAM Leaders Ltd (ASX: WLE), WAM Microcap Ltd (ASX: WMI) and Charter Hall Long WALE REIT (ASX: CLW).

The post How much is needed in superannuation to target a $7,500 monthly passive income? appeared first on The Motley Fool Australia.

More reading

• How to turn $500 a month into $500,000 with ASX shares
• 2 rock-solid ASX dividend shares to buy this May
• How to build a $52,000 annual passive income
• Why Catapult Sports, IAG, Telstra, and Tuas shares are falling today
• 5 ASX 200 shares downgraded by the experts this week

Motley Fool contributor Tristan Harrison has positions in Future Generation Australia, Future Generation Global, Hearts And Minds Investments, Rural Funds Group, Wam Microcap, Wcm Global Growth, and Wcm Quality Global Growth Fund. 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 and Telstra 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 more difficult than it needs to be.

But for beginners, a simple buy and hold approach could be a very sensible place to start.

Instead of trying to time the market, investors can focus on owning quality exchange traded funds (ETFs) that provide exposure to strong long-term trends.

This reduces the pressure to pick individual winners and allows investors to benefit from the power of compounding.

With that in mind, here are three ASX ETFs that could be worth buying and holding for the long term.

Betashares S&P/ASX Australian Technology ETF (ASX: ATEC)

The Betashares S&P/ASX Australian Technology ETF could be a good option for beginners wanting exposure to the local tech sector.

Australia may not be as famous for technology as the United States, but the ASX is home to some impressive software, payments, online marketplace, and digital infrastructure businesses.

This ETF brings many of these companies together in a single fund. This means investors can gain exposure to the sector without needing to decide which individual technology share will perform best.

That could be useful because local tech shares can be volatile. Earnings expectations, interest rates, and investor sentiment can all move prices around. But over the long run, the digitisation of business and consumer activity remains a powerful tailwind.

For beginners, the Betashares S&P/ASX Australian Technology ETF offers a straightforward way to back Australian innovation without putting all their faith in one company. It was recently recommended by analysts at Betashares.

Betashares Global Cash Flow Kings ETF (ASX: CFLO)

Another ASX ETF that could work well for beginners is the Betashares Global Cash Flow Kings ETF.

This fund focuses on global companies with strong free cash flow generation. That is a valuable quality because cash flow gives businesses options. They can reinvest in growth, pay dividends, reduce debt, make acquisitions, or return capital to shareholders.

This fund is not about chasing the most exciting theme of the moment. Its strategy is based on finding financially strong businesses that are generating real cash.

That could make it a useful building block for investors who want global exposure with a quality filter. It may also provide some balance alongside more growth-focused ETFs.

Rather than trying to analyse company accounts one by one, the Betashares Global Cash Flow Kings ETF does the screening and delivers a portfolio of global businesses with attractive cash flow characteristics. It was also recently recommended by the team at Betashares.

Betashares Nasdaq 100 ETF (ASX: NDQ)

The Betashares Nasdaq 100 ETF is one of the most popular growth-focused ETFs on the ASX, and it is easy to see why.

It gives investors exposure to many of the companies driving change across the global economy. These businesses are involved in areas such as artificial intelligence, cloud computing, digital advertising, semiconductors, streaming, ecommerce, and software.

What makes this fund interesting for beginners is that it provides access to these trends in one trade. Investors do not need to guess which mega-cap technology company will win next. The fund spreads exposure across a group of major Nasdaq-listed businesses.

It will not be smooth sailing every year. Growth-heavy ETFs can fall sharply when markets turn cautious. But for investors with a long-term mindset, the Betashares Nasdaq 100 ETF offers a simple way to participate in some of the world’s most important innovation stories.

The post 3 amazing ASX ETF for beginners to buy and hold appeared first on The Motley Fool Australia.

More reading

• 3 ASX ETFs that could help investors tap into global growth
• Investors who looked offshore for tech exposure are being handsomely rewarded by these ASX ETFs
• 5 excellent ASX ETFs to buy and hold for 25 years
• 5 reasons I’d buy the NDQ ETF with $10,000
• Why the Betashares Nasdaq 100 ETF could be the best way to capture the AI boom

Motley Fool contributor James Mickleboro has positions in BetaShares Nasdaq 100 ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended BetaShares Nasdaq 100 ETF. The Motley Fool Australia has positions in and has recommended BetaShares Nasdaq 100 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Share prices are always changing, so there are always opportunities to invest in ASX shares that are undervalued.

Multiple experts have called the two ASX shares in this article a good value buy, and I’d definitely agree with them.

Both of the businesses are delivering strong core growth and have plans for more.

Universal Store Holdings Ltd (ASX: UNI)

According to CMC Invest, there have been nine recent analyst ratings on the business, with all of those being a buy. Collectively, those analysts think the business could rise by around 50% over the next year, with a price target of $9.79.

I don’t know whether it’ll rise that much, but I do think the business is undervalued because of how well it’s growing.

The business sells premium apparel to younger, fashion-focused customers through its two main businesses – Universal Store and Perfect Stranger.

In the first 43 weeks of FY26, the ASX share reported total sales growth of 14%. The Universal Store brand saw total sales growth of 11.8% (with like-for-like sales growth of 8.5%) and Perfect Stranger saw total sales growth of 39.8% (with like-for-like sales growth of 12.9%).

Excitingly, the company is expecting its underlying profit (EBITA) profit margin to increase in FY26, which could help the net profit after tax (NPAT) metric to rise faster than revenue. FY26 EBITA is expected to rise by around 15% (at the mid-point of its guidance).

When a business trades on a relatively low earnings multiple and is growing profit by more than 10% per year, it looks very attractive to me.

According to the forecast on CMC Invest, the business is trading at just 12x FY26’s estimated earnings.

Sigma Healthcare Ltd (ASX: SIG)

Sigma Healthcare is the name behind the brand Chemist Warehouse, Australia’s leading chemist chain.

But, it hasn’t reached a point where its Australian growth has significantly slowed.

Chemist Warehouse’s Australian network saw total sales grow by 16.7% between 1 July 2025 to 30 April 2026, while like-for-like growth was 14.4%. It continues to add new stores to its network, which can help boost both sales and scale benefits.

The ASX share’s international store network growth has also very pleasing, though it’s a much smaller dollar amount at this stage. International total sales for 1 July 2025 to 31 March 2026 was 24.7%, while like-for-like growth was 11.8%. Currently it’s in New Zealand, Ireland, Dubai and China.

It’s also expanding into the UK, another large market for the company.

According to CMC Invest, there have been eight recent buy ratings on the business, with an average price target of $3.25.

In five years, I think the ASX share could be a much bigger, more profitable business.

The post Brokers say these 2 ASX shares are highly undervalued — here’s why I agree appeared first on The Motley Fool Australia.

More reading

• Experts name 2 ASX growth shares to buy this week
• Bell Potter names the best ASX dividend shares to buy in May
• Buy, hold, sell: Ventia, Sigma, and Mineral Resources shares
• 3 reasons to buy Sigma Healthcare shares today
• Buy, hold, sell: ResMed, Sigma, and TechnologyOne shares

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

Building wealth with ASX shares does not always require a big starting balance.

For many investors, the more realistic path is putting money to work each month and letting time do the heavy lifting.

A regular $500 monthly investment may not sound life-changing on its own. But combined with patience, discipline, and a sensible mix of quality ASX shares, it could grow into something much more substantial.

The type of shares that could help

To aim for strong long-term returns, investors would likely need exposure to growth assets.

That could mean combining different types of ASX shares. A healthcare technology leader such as Pro Medicus Ltd (ASX: PME) could provide growth, while Goodman Group (ASX: GMG) offers exposure to logistics and data infrastructure.

Defensive names such as Woolworths Group Ltd (ASX: WOW) and Telstra Group Ltd (ASX: TLS) could add more stability, while software shares such as TechnologyOne Ltd (ASX: TNE), WiseTech Global Ltd (ASX: WTC), and Xero Ltd (ASX: XRO) bring long-term earnings potential.

Together, shares like these could give an investor a mix of growth, resilience, and income.

Of course, there is no guarantee that any portfolio will deliver a 10% average annual return. But this is a reasonable long-term assumption to use for illustration, given historical share market returns.

What the numbers show

If an investor put $500 a month into ASX shares and achieved an average return of 10% per annum, the portfolio could grow to approximately $500,000 in around 23 years.

That is the power of compounding.

The investor would contribute about $135,000 over that period. The rest would come from investment returns building on previous returns.

This is why time matters so much. In the early years, progress can feel slow because most of the growth comes from contributions. But as the balance gets larger, compounding starts doing more of the work.

Why monthly investing helps

Investing monthly also has a practical advantage.

It removes the pressure of trying to pick the perfect time to buy. Instead, investors buy through different market conditions.

This is known as dollar-cost averaging.

Some months, shares will be expensive. Other months, they will be cheaper. Over time, regular investing can smooth out entry prices and help investors stay consistent.

That discipline is important because markets will not rise in a straight line. There will be selloffs, disappointing results, and periods where patience is tested.

Diversification is essential

The recent struggles of CSL Ltd (ASX: CSL) are a useful reminder that even high-quality companies can go through very difficult periods.

That is why diversification matters. A portfolio should not rely too heavily on one company, one sector, or one theme. Spreading money across different types of businesses can reduce the damage when one holding underperforms.

The goal is not to avoid every setback. That is impossible. The goal is to build a portfolio that can keep moving forward even when some parts are struggling.

Foolish takeaway

Turning $500 a month into $500,000 is not about luck.

It is about investing regularly, owning quality assets, staying diversified, and giving compounding enough time to work.

Time, patience, and discipline are the ingredients that can turn a simple monthly habit into serious long-term wealth.

The post How to turn $500 a month into $500,000 with ASX shares appeared first on The Motley Fool Australia.

More reading

• How to build a $52,000 annual passive income
• Thinking about dividend yields? Here’s how much the top 10 ASX 200 shares pay
• Why Catapult Sports, IAG, Telstra, and Tuas shares are falling today
• 2 ASX 200 shares I’d buy for the AI infrastructure boom
• Morgan Stanley names 3 ASX shares to buy

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

The Age Pension is a sum paid to Australians aged 67 years or older to help fund their retirement.

While the Age Pension is a fantastic tool to help older individuals, it might not necessarily be enough to find the retirement lifestyle that you want.

Here’s a breakdown of everything you need to know.

How much is the Age Pension payment?

The maximum fortnightly Age Pension payment is $1,100.30 for single Australians or older. Couples can get up to $829.40 per person per fortnight. 

The rates don’t include any additional potential supplement rates.

The amount you’ll receive can also vary depending on where you fall under the Age Pension assets and income tests. It is possible to earn a part-payment if your income and/or assets are over the threshold, and the amount is generally calculated on a sliding scale.

How much will a comfortable retirement cost me?

According to Association of Superannuation Funds of Australia (ASFA) defines a comfortable retirement as one which allows Australians to maintain a good standard of living. It assumes you’ll keep top-level private health insurance, will own a reasonable car brand, do regular leisure activities, have funds for home repairs and renovations, go for an occasional meal out, and maybe even an annual domestic trip (or an occasional overseas one).

According to ASFA data, a comfortable retirement lifestyle will cost individual Australians around $54,840 a year. For couples, this can be closer to $77,375 a year. That translates to around $2,100 and $3,000 per fortnight, respectively.

You’ll note this is significantly higher than the Age Pension payment, meaning that Australians can’t rely on the Age Pension alone if they want to retire comfortably.

What about a modest retirement?

A modest retirement assumes you’ll hold basic health insurance, a cheap car model (or none at all), a limited home repair budget, minimal utility expenses, limiting dining out, and infrequent travel, and it’ll cost a lot less. 

In order to live a modest retirement lifestyle, individual Australians can expect to need $35,503 per year, or for a couple this would be closer to $51,299 per year. That translates to around $1,360 and $2,000 per fortnight respectively. 

Again, calculations show the Age Pension alone isn’t enough to fund what ASFA classifies as a modest retirement.

The verdict – your superannuation will need to bridge the gap

To fund a comfortable retirement, ASFA has calculated that single Australians will need a superannuation balance of around $630,000, or couples would need $730,000. 

These sums still also assume you’ll earn a part Age Pension. It’s not possible to rely solely on the Age Pension if you want to retire comfortably. 

The post Is the Age Pension enough to retire comfortably in Australia? appeared first on The Motley Fool Australia.

More reading

• 3 amazing ASX ETF for beginners to buy and hold
• Brokers say these 2 ASX shares are highly undervalued — here’s why I agree
• How to turn $500 a month into $500,000 with ASX shares
• 2 rock-solid ASX dividend shares to buy this May
• These are the cheapest ASX ETFs on the Australian market

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 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.

High dividend yields are easier to find after interest rates rise and income shares fall out of favour.

But I think some of those yields are more interesting than others.

For me, the best opportunities are ASX dividend shares with income supported by real assets, long-term contracts, or rental streams with reasonable visibility.

That is why the two shares in this article stand out to me.

Both offer trailing yields above 5%, which is attractive in its own right. But I also like the assets sitting behind those distributions.

APA Group (ASX: APA)

APA is one of the first income shares I would consider buying.

The company owns and operates a large portfolio of energy infrastructure assets, including gas pipelines, electricity transmission, power generation, and energy storage assets.

What appeals to me is the role these assets play in the economy.

Energy infrastructure is not a short-term trend. Businesses, households, and industries need a reliable energy supply, and large-scale infrastructure is difficult to replicate quickly.

APA’s earnings are supported by contracted revenue, regulated assets, and long-term customer relationships. That can give investors a more defensive income stream than many cyclical dividend shares.

The trailing dividend yield is currently around 5.5%, which I think looks appealing for a business with this type of infrastructure backing.

There are risks to consider. APA is exposed to interest rates, debt costs, regulation, and long-term changes in Australia’s energy system. Investors should also remember that infrastructure shares can still fall when bond yields rise or when the market becomes more cautious toward income assets.

But for investors seeking a combination of income and exposure to essential infrastructure, I think APA is a solid option.

Charter Hall Long WALE REIT (ASX: CLW)

The second ASX dividend share I would consider is Charter Hall Long WALE REIT.

This real estate investment trust (REIT) focuses on properties with long leases and tenants with strong covenants. The idea is simple: own a diversified portfolio of assets that can provide stable rental income over time. That makes it very relevant for income investors.

The portfolio is currently valued at around $6 billion, comprising 515 properties, with 99.9% occupancy and a weighted average lease expiry (WALE) of 9.2 years.

I think those numbers are important because they point to income visibility. A long WALE portfolio can reduce some of the uncertainty that comes with shorter leases, vacancy risk, and constant tenant turnover.

Another positive is that the Charter Hall Long WALE REIT currently has a trailing distribution yield of around 7%.

That is a strong yield, but investors should still be realistic. REITs can be sensitive to interest rates, property valuations, and refinancing costs. If rates remain higher for longer, the sector may continue to face pressure.

Even so, I think its long leases, high occupancy, and diversified property base make it a compelling income option for investors comfortable with property market risk.

Foolish Takeaway

For income investors, APA and the Charter Hall Long WALE REIT offer two different ways to collect regular cash flow from real assets.

APA is linked to energy infrastructure. Charter Hall Long WALE REIT is linked to long-leased property.

Both come with risks, especially while interest rates remain a major focus for markets. But I think their yields are supported by assets that play a clear role in the economy.

The post 2 rock-solid ASX dividend shares to buy this May appeared first on The Motley Fool Australia.

More reading

• How to build a $52,000 annual passive income
• How to invest $20,000 for passive income in superannuation
• Passive income investors: These 3 ASX dividend shares yield 5% (or more)
• These ASX dividend shares could power your retirement income
• CGT tax changes may encourage investors into ASX dividend shares: Expert

Motley Fool contributor Grace Alvino 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 Apa Group. 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 investing in ASX exchange-traded funds (ETFs), one of the most important factors in investors’ overall returns is the fees that they pay.

All ASX ETFs charge an annual management fee. This goes towards the costs of providing and running the fund, which is a managed investment at the end of the day. Saying that, fees on ASX ETFs vary wildly. Some charge minuscule fees, whilst others can ask more than ten times what the cheapest ASX ETFs do.

It’s my firm belief that most ASX ETF investors should prioritise a low fee above all else. Fortunately, the lowest fees on the ASX tend to be attached to high-quality index funds that are diversified, cover entire markets, and are, at least in my opinion, suitable for almost every ASX investor.

Let’s talk about some of the ASX’s cheapest ETFs.

What are the ASX’s cheapest ETFs?

First up, we have the iShares S&P 500 ETF (ASX: IVV). This popular fund tracks the most famous index in the world, the S&P 500. This represents the largest 500 stocks listed in the United States, and includes everything from NVIDIA, Amazon, and Apple to Exxon Mobil, Coca-Cola Co, and General Motors.

IVV is a very competitive ETF cost-wise, charging a management fee of 0.04% per annum. That’s $4 per year for every $10,000 invested.

Luckily, there’s another ASX ETF closer to home, that is just as cheap. For investors looking to invest in a simple ASX index fund, the Global X Australia 300 ETF (ASX: A300) is your cheapest option. A300 works in a similar manner to IVV. However, instead of the 500 largest US stocks, this fund tracks the largest 300 Australian stocks listed on our local market. That’s everything from Commonwealth Bank of Australia (ASX: CBA) and Telstra Group Ltd (ASX: TLS) to JB Hi-Fi Ltd (ASX: JBH) and Ampol Ltd (ASX: ALD).

Like IVV, A300 also charges a management fee of 0.04%.

But wait, it gets cheaper

You may think that $4 a year for every $10,000 invested is as good as it gets for passive investors. But no, there is an even cheaper ETF still.

It is none other than the Vanguard U.S. Total Market Shares Index ETF (ASX: VTS). This fund works in a similar manner to IVV. However, instead of just the largest 500 US stocks, VTS covers a far larger swath of the American market. It currently has close to 3,500 individual holdings.

Of course, it is still quite top-heavy, with stocks like NVIDIA, Amazon, and Apple taking up a big chunk of room. But if you’re ok with the larger portfolio of US stocks, this ASX ETF is the cheapest you can find right now. It asks a management fee of just 0.03%, or $3 per year for every $10,000 invested.

The post These are the cheapest ASX ETFs on the Australian market appeared first on The Motley Fool Australia.

More reading

• VGS vs IVV: Which ASX ETF is better?
• Why I’d buy these ASX ETFs if I were a beginner
• 5 excellent ASX ETFs to buy and hold for 25 years
• How to build a $150,000 ASX share portfolio from scratch
• How to generate $20,000 a year in passive income on the ASX

Motley Fool contributor Sebastian Bowen has positions in Amazon, Apple, and Coca-Cola. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon, Apple, Nvidia, and iShares S&P 500 ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended General Motors. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool Australia has recommended Amazon, Apple, Nvidia, 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.

Generating $52,000 a year in passive income from ASX shares is a big target.

It is the equivalent of $1,000 a week, which is enough to make a meaningful difference to an investor’s lifestyle, retirement plans, or financial flexibility.

But the important point is that this sort of income stream is unlikely to come from chasing the highest yields on the market. A more realistic approach is to build patiently, focus on quality, reinvest where possible, and let compounding do its work over many years.

The number investors need

Let’s start with the income target.

If an investor wants $52,000 a year from ASX dividend shares and assumes an average dividend yield of 5%, they would need a portfolio worth approximately $1.04 million.

That is a large number, but it gives investors something concrete to work towards.

How compounding can help

The journey to a seven-figure portfolio becomes more achievable when investors use time and compounding to their advantage.

If an investor can achieve an average annual total return of 10%, including capital growth and dividends, their money could grow significantly over long periods. This return is broadly in line with long-term share market averages, but it is not guaranteed.

Based on a 10% annual return, an investment of $1,000 per month into ASX shares would turn into over $1 million in around 23 years.

But it is worth remembering that some years will be strong, while others will be painful. That is why discipline matters.

What could go into the portfolio?

A passive income portfolio should not rely on one sector doing all the work.

Telstra Group Ltd (ASX: TLS), for example, is often viewed as a defensive dividend option because of its essential telecommunications infrastructure, large customer base, and recurring earnings profile.

Infrastructure names can also have a role to play. APA Group (ASX: APA) owns energy infrastructure assets, while Transurban Group (ASX: TCL) provides exposure to toll roads. Both operate in areas where long-term demand and contracted or regulated revenue streams can support income.

Investors may also look at real asset exposure through Rural Funds Group (ASX: RFF), which owns agricultural properties leased to operators. This gives the portfolio a different source of income from banks, retailers, or infrastructure shares.

Consumer-facing names can add another layer. Woolworths Group Ltd (ASX: WOW) has defensive qualities through grocery retailing, while Harvey Norman Holdings Ltd (ASX: HVN) offers exposure to retail, property, and dividends, though its earnings can be more cyclical.

The goal is not to own every income share available. It is to build a diversified group of reliable dividend payers that can support both income and long-term capital growth.

Foolish takeaway

A $52,000 annual passive income will not happen quickly for most investors.

But the formula is not complicated. Keep adding capital, reinvest dividends, diversify across quality ASX income shares, and then let time and compounding do the hard work.

The post How to build a $52,000 annual passive income appeared first on The Motley Fool Australia.

More reading

• This ASX 200 dividend share could be a quiet winner for the next decade
• 5 ASX retail shares whose 12-month price targets just got slashed
• Why Catapult Sports, IAG, Telstra, and Tuas shares are falling today
• 5 ASX 200 shares downgraded by the experts this week
• Here’s a 9% ASX dividend stock to consider for a monthly passive income

Motley Fool contributor James Mickleboro has positions in Woolworths Group. 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 Apa Group, Harvey Norman, Rural Funds Group, 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.