I’m always banging the drum that ASX ETF investing doesn’t have to come with minimal upside. 

With the rise of thematic funds, investors can now easily target sectors and niche areas of the market. 

While investors need to be conscious of overexposure, capturing tailwinds in these sectors can lead to big gains. 

Already in 2026 there have been funds that have shot ahead of benchmark indexes. 

For context, the S&P/ASX 200 Index (ASX: XJO) is up 2.29% year to date. 

That’s nothing to sneeze at. 

However these three thematic ASX ETFs have flown significantly higher so far this year. 

iShares Msci South Korea ETF (ASX: IKO)

As the name suggests, this ASX ETF provides exposure to large and mid-sized companies in South Korea. 

According to iShares, The fund aims to provide investors with the performance of the MSCI Korea 25/50 Index, before fees and expenses. 

The index is designed to measure the performance of Korean large and mid-capitalisation companies. 

In 2026, this ASX ETF is already up an impressive 21%. 

The South Korean equity market is a major Asian economy with companies across technology, manufacturing, consumer and financial sectors.

Technology and manufacturing in particular are underrepresented here in Australia. 

Furthermore, South Korea plays an important role in global production of semiconductors, electronics and tech – sectors often tied to innovation and long‑term growth.

This fund’s two largest holdings are Samsung Electronics and SK Hynix which make up approximately 44% of the fund. 

Global X Copper Miners ETF (ASX: WIRE)

This ASX ETF provides access to a global basket of copper miners which stand to benefit from being a key part of the value chain facilitating growth in major areas of innovation such as technology, infrastructure and clean energy.

More specifically, copper is essential for electric vehicles (EVs), renewable energy, and electronics. As the world shifts toward clean energy and electrification, demand for copper is expected to grow significantly.

The global copper price has been on a steady incline in the last year thanks to this demand.

This ASX ETF has certainly captured these tailwinds, rising more than 19% year to date and 110.40% over the last 12 months. 

Global X Green Metal Miners ETF (ASX: GMTL) 

Another thematic ASX ETF steaming ahead this year is the Global X Green Metals Miners fund. 

It has captured the critical minerals rally, rising more than 100% in the last 12 months and already 11.23% in 2026. 

It provides exposure to global companies which produce critical metals for clean energy infrastructure and technologies, including lithium, copper, nickel and cobalt.

The post These ASX ETFs are already up between 11% and 21% in 2026! appeared first on The Motley Fool Australia.

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• The growing case for critical minerals – Expert
• Meet the ASX ETF up 119% in a year
• ASX copper shares surge as commodity hits record high
• 3 ASX ETFs off to a hot start in 2026
• This ASX ETF has returned 34% annually since inception

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.

The National Australia Bank Ltd (ASX: NAB) share price has recently been named as the top pick among the major ASX bank shares by UBS.

UBS recently said in a note that NAB is its top pick, followed by Westpac Banking Corp (ASX: WBC), ANZ Group Holdings Ltd (ASX: ANZ), and Commonwealth Bank of Australia (ASX: CBA).

However, despite noting that the ASX bank share sector delivered a mid-teen total shareholder return (TSR) for investors in 2025 and that it’s not expecting positive returns for the sector in 2026, UBS sees the NAB share price as a pleasing opportunity that could deliver a double-digit return.

Why is this a good time to invest?

UBS identified “select opportunities” in certain names, which include NAB. In the note, it upgraded NAB from a neutral rating to a buy.

The broker thinks there’s potential for NAB’s earnings per share (EPS) to rise with the Reserve Bank of Australia (RBA) cash interest rate forecast to increase by 50 basis points in 2026.

The RBA just hiked by 25 basis points, and UBS is suggesting there could be another one later this year.

Those rate hikes could contribute to the NAB net interest margin (NIM) and revenue performing better than expected by other analysts across the market. The NIM measures a bank’s lending profitability, including the loan rate and the cost of funding those loans (with savings accounts, term deposits, transaction accounts, and so on).

The broker also suggested that loan growth could be stronger than the market is expecting:

Core earnings may also benefit from higher-than-expected loan growth, while banks are actively managing persistent cost pressures, which are ~+6.0% on an underlying basis.

UBS also noted that it upgraded its view on the NAB share price because of structural growth in business banking. Almost half of NAB’s valuation, in the broker’s view, is tied to a “market-leading” business and private banking segment, which has defended its profitability and supports group return on tangible equity (ROTE) of around 12.5%.

Competition and cost inflation

UBS did warn that competition could be a factor during the year, while certain costs may increase during the period. It said:

We expect competition in the Aussie banking sector to grow further in 2026, particularly in managing deposits, especially if rates rise. Controlling costs… will be critical, with tech spend considered essential. At the same time, wage inflation and shifts in workforce composition are driving staff expenses higher (+5.0%).

NAB share price target

UBS currently has a price target of $47 on the ASX bank share. That implies a possible 11% rise from where it is today over the next 12 months. Plus, the dividends can also be added in to that possible return – this is up to the discretion of the board of directors.

Overall, UBS sees a positive outlook for the NAB share price.

The post The NAB share price is a buy after the RBA rate hike – UBS appeared first on The Motley Fool Australia.

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• UBS just rated ASX bank shares NAB, BOQ and Macquarie as a buy

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 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 share market is an excellent place to find investments that can provide monthly passive income, whether that’s $50 per month, $500 per month or even more.

Australian companies are capable of providing investors with dividends (and franking credits), unlocking a pleasing level of income for those who want it.

Every business that pays a dividend has a dividend yield, so we can work out how much we’d need to invest to unlock a desired level of income, such as $500 per month or $6,000 per year.

How to generate $500 of monthly income

Receiving $6,000 of annual passive income is a worthy goal – it’s a sizeable level of cash each year.

How much money it would require essentially depends on the dividend yield of the portfolio.

For example, if the portfolio had a 6% dividend yield, then it would take a portfolio value of $100,000 to generate $6,000 of annual passive income.

With a portfolio dividend yield of 5%, the required portfolio value is $120,000.

A portfolio dividend yield of 4% would mean a portfolio value of $150,000 is needed.

If the portfolio dividend yield was 3%, then you’re talking about needing a portfolio value of $200,000.

Clearly, all of those figures would require quite a lot of investment cash.

It’s important to note that the higher dividend yields may not be as ‘safe’ as lower dividend yields.

Additionally, I wouldn’t expect as much growth from high-yielding shares compared to lower-yielding ones over time. This is because a high yield indicates a high dividend payout ratio, with reduced cash held by the business for growth investing. A lower price/earnings (P/E) ratio also suggests the the market isn’t assigning much value to growth opportunities.

Benefit from compounding

We don’t need to come up with all of that cash ourselves to invest for the passive income.

Aussies can regularly invest into the ASX share market and let compounding grow the portfolio balance for you. The longer you let your money grow, the less you need to invest yourself. Names like MFF Capital Investments Ltd (ASX: MFF) and Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) springs to mind as ideas for this tactic.

For example, if someone were to invest $1,000 per month and it returned an average of 10% per year (the historical long-term average return of the ASX share market), it would grow into $100,000 after seven years, $150,000 after nine years and $200,000 within 11 years.

That shows that an investor starting with nothing could start generating useful passive income for their life fairly quickly. Today is a great day to get started.

The post Passive income: How much do you need to invest to make $500 per month? appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in Mff Capital Investments and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Mff Capital Investments. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

If you told me I could only buy three ASX stocks in 2026, it would be an incredibly tough call to make.

But I think I have managed to narrow it down to the high-quality stocks in this article that I believe offer value for money and strong long-term capital growth potential. 

Pro Medicus Ltd (ASX: PME)

Pro Medicus is a textbook example of a high-quality Australian growth company that has built a global leadership position.

This ASX stock’s Visage platform sits at the premium end of medical imaging software, particularly in the US hospital market. What stands out to me is how deeply embedded the product becomes once installed. Switching costs are high, contracts are long-term, and customers tend to expand their usage over time.

The addressable market is very large relative to Pro Medicus’ current penetration, especially across different medical specialties and geographies. That gives it a long growth runway, even after years of strong execution.

It’s not a cheap stock on traditional metrics, but following a very sharp decline in recent months, I think it looks very attractive. Further, if execution continues, I think Pro Medicus can keep compounding for many years.

REA Group Ltd (ASX: REA)

REA Group is one of those ASX stocks that feels almost boring until you step back and look at how dominant it really is.

Realestate.com.au is the default destination for property search in Australia. That position gives REA enormous pricing power and a data advantage that competitors struggle to match. Agents don’t just advertise on the platform. They rely on it.

What I like most is that REA continues to innovate within that dominance. New products, better data tools, and premium listing formats allow it to grow revenue faster than transaction volumes over time.

Property cycles come and go, but REA’s platform strength means it tends to emerge stronger after each one. That durability is exactly what I want if I’m only picking a handful of stocks.

Wesfarmers Ltd (ASX: WES)

Wesfarmers is a stock that offers consistency, capital discipline, and resilience.

The group owns a collection of high-quality businesses, including Bunnings and Kmart, that generate strong cash flows across economic cycles. That cash flow gives management flexibility. They can reinvest, return capital to shareholders, or reshape the portfolio when opportunities arise.

What gives me confidence in Wesfarmers is its long track record of rational decision-making. It doesn’t chase trends. It focuses on returns. Over time, that approach has quietly compounded shareholder value.

If markets get more volatile in 2026, this is exactly the kind of anchor I’d want in a portfolio.

Foolish takeaway

If I could only buy three stocks in 2026, I’d want a mix of world-class growth, platform dominance, and defensive strength.

Pro Medicus offers global healthcare growth. REA Group brings unmatched digital dominance in property. Wesfarmers provides stability and disciplined capital allocation.

They’re different businesses, solving different problems, but they share one important trait. They’ve already proven they can execute. And if I’m narrowing my choices, that matters more than anything else.

The post If I could only buy 3 stocks in 2026, I’d pick these 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’s parent company Motley Fool Holdings Inc. has recommended Pro Medicus. The Motley Fool Australia has recommended Pro Medicus and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

A report from Canaccord Genuity has given a mixed outlook on some of the largest ASX healthcare shares including ResMed Inc (ASX: RMD), Cochlear Ltd (ASX: COH) and CSL Ltd (ASX: CSL) shares. 

The healthcare sector is coming off a tough 2025. 

The S&P/ASX 200 Health Care (ASX: XHJ) Index dropped almost 25% last year. 

It was largely dragged down by a 39% fall from CSL shares. 

The Reporting Season Preview report from Canaccord Genuity/Wilsons Advisory said with the sector still heavily out of favour and valuations broadly discounted relative to history, there is potential for meaningful share price swings within the sector.

Greg Burke, Equity Strategist, said the financial advisory firm expects another mixed set of results this reporting season.

He said ResMed, CSL and Cochlear are the key large-cap stocks to watch.

ResMed shares

ResMed shares remain down more than 8% over the last 12 months. 

However the healthcare stock did deliver a strong quarterly update last week. 

The recent report from Canaccord Genuity said ResMed remains a high-conviction exposure.

It said the stock is in an upgrade cycle that is expected to continue over the medium term.

This is supported by healthy top-line growth from robust CPAP demand and ongoing gross margin expansion. 

Consensus estimates remain conservative, particularly on gross margins, leaving significant scope for further upgrades.

Cochlear shares

Cochlear shares are currently trading almost 17% below their 52-week high.

The report from Canaccord Genuity said Cochlear has delivered three successive downgrades, driven by its services segment, which is reason for caution heading into its result. 

While management has already guided to a soft 1H result due to a 2H earnings skew, we see risks that this skew is not fully reflected in consensus or well understood by the market. That said, despite near-term downgrade risk, the medium-term growth outlook – supported by the Nexa system rollout – remains attractive.

The report said any post-result weakness could present an attractive buying opportunity in the stock.

It is set to release earnings results on 13 February. 

CSL shares 

CSL shares are trading almost 33% below their 52-week high. 

According to Canaccord Genuity, CSL was arguably the highest profile underperformer of 2025.

The company has now issued four successive downgrades. Bulls argue the stock is excessively cheap, trading at a forward P/E of 17.5x – its lowest in 10 years – while still offering reasonable growth, with a 3-year consensus EPS CAGR of 9%. Bears counter that CSL faces structural headwinds and, as it remains in a downgrade cycle, consensus figures remain at risk.

CSL is set to release earnings results on 11 February.

The post What can investors expect from ResMed, Cochlear and CSL shares this reporting season? appeared first on The Motley Fool Australia.

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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 CSL, Cochlear, and ResMed. The Motley Fool Australia has positions in and has recommended ResMed. The Motley Fool Australia has recommended CSL and Cochlear. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Earnings season can be a difficult period for investors to navigate.

Investing before an ASX company releases its February earnings can offer upside if results beat expectations. 

But it also carries higher risk because unexpected disappointments can trigger sharp price drops. 

Investing after the earnings release reduces uncertainty. It allows investors react to confirmed information and guidance, though some of the biggest price moves may already be priced in, limiting short-term upside.

Here is an updated outlook for two ASX REIT stocks this earnings season. 

Centuria Office REIT (ASX: COF) 

Yesterday, we saw share price swings for Centuria Office REIT following the release of HY26 results.

The share price fell roughly 2% before midday before recovering to finish 0.94% higher at approximately $1.07 per share. 

A report from Bell Potter noted funds from operations (FFO) of 5.6 cents per share was slightly below expectations, coming in 0.9% under Bell Potter’s forecast.

Despite this modest first-half earnings miss, the company reaffirmed its FY26 guidance for FFO of between 11.1 cents and 11.5 cents per share, with the midpoint of the range sitting 0.9% ahead of Bell Potter’s estimate.

The ASX REIT also reaffirmed its full-year distribution guidance, with dividends per share expected to be 10.1 cents, signalling confidence in the full-year earnings and income outlook.

Bell Potter also noted some key vacancies at 818 Bourke St (currently 25% vacant) and 201 Pac Hwy (33% vacant) remain outstanding, which limits upside. 

Following yesterday’s results, the broker has placed a hold recommendation on the REIT, along with a price target of $1.05. 

While we don’t necessarily see numerous short term upside catalysts for COF, 1H26 outcomes suggest the likelihood of downside to guidance has reduced following the de-risking of FY26 expiries.

Charter Hall Retail REIT (ASX: CQR)

Charter Hall is set to release results tomorrow on Friday 6 February. 

The company owns and manages a portfolio of convenience-focused retail properties. These include supermarket-anchored neighbourhood and subregional shopping centres, service stations, and some retail logistics properties.

It has performed well in the last year, rising roughly 20% in that span. 

It closed yesterday at $3.87. 

However, Citi currently has a buy rating and $4.50 price target on its shares.

Additionally, it is projecting dividend yields of more than 6%. 

This could be an example of an REIT that investors may want to target before earnings results are released. 

It has shown a track record of successful capital deployment and improving margins recently. 

Should Charter Hall match or exceed expectations, the share price may jump considerably. 

The post Are these ASX REITs a buy, hold or sell this earnings season? appeared first on The Motley Fool Australia.

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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 positions in and has recommended Charter Hall Retail REIT. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

ASX consumer discretionary stock Jumbo Interactive Ltd (ASX: JIN) is in focus after a rough day of trading. 

Yesterday, the consumer discretionary stock tumbled almost 5% after it released its preliminary 1H26 Financial Results.

The company operates in the lotteries sector. It develops technology to manage lottery businesses and charity lotteries. It is also a major digital retailer of both national jackpot and charity lotteries in Australia.

Jumbo said revenue is forecast to increase 29% to $85.3 million in the first half. This is supported by a 15.7% rise in total transaction value (TTV) to $524.7 million.

Underlying EBITDA is also expected to grow strongly, reaching $37.5 million for the half, up 22.6% from $30.6 million in the prior corresponding period.

Despite seemingly positive results, it seems investors were left disappointed, as the stock price tumbled on the back of the news. 

What’s Bell Potter’s view?

Following yesterday’s release, Bell Potter provided updated guidance on this ASX consumer discretionary stock. 

The broker said Jumbo’s first-half result shows solid execution in diversifying away from lotteries, with SaaS, Managed Services, and charity and proprietary products driving growth and lifting non-TLC revenue to an estimated 39% of total revenue, up from 29% in FY25. 

However, this strength masks weakness in Lotteries, with total transaction value of $207.9m coming in 6% below expectations. 

According to the report, this points to potential market share pressure at Oz Lotteries or softer-than-expected digital penetration. 

Greater clarity on the lottery market share is expected following The Lottery Corp’s 1H26 report on 18 February. 

Based on this guidance, EPS estimates were revised (-4%/+4%/+4%). 

This reflects the 1H26e result, lower jackpots, digital penetration and market share in FY26e, higher marketing costs, and revised amortisation, while the target price has been reduced due to a higher asset beta amid rising AI-related risks for software companies.

Price target reduction for this consumer discretionary stock

In Bell Potter’s report, the broker revealed an updated price target of $10.80 (previously $12.80). 

It maintained its hold recommendation. 

From yesterday’s closing price of $10.01, that indicates an upside of approximately 8%. 

We continue to see risks to JIN’s market share as TLC’s offering improves and as new players play lotteries. We await evidence of positive market share data during periods of strong Powerball jackpots before we turn more positive on the stock. Further, we believe there is potential for worsening sentiment towards software companies driven by advancements in AI technology that would see increasing competition for these companies.

The post Is this ASX consumer discretionary stock a buy after yesterday’s crash? appeared first on The Motley Fool Australia.

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

There has already been plenty of movement this earnings season. Yesterday investors were exiting positions in ASX healthcare stock Vitrafy Life Sciences Ltd (ASX: VFY). 

Its share price fell almost 2% yesterday. 

For context, the S&P/ASX 200 Index (ASX: XJO) gained nearly 1%. 

Vitrafy Life Sciences develops a range of proprietary smart cryopreservation hardware devices along with Lifechain – an integrated, cloud-based software platform, to provide a complete, vertically integrated cryopreservation solution to retain the quality of cryopreserved biomaterials.

The company released FY26 Half Year Results that included: 

• Underlying Operating Loss of.-$7.5m
• Operating Cash Outflow of $6.6m v -$4.0m PcP. 
• Cash and cash equivalents ended the period at $22.8m v $29.5m at FY25

Despite yesterday’s dip, the share price remains up more than 26% year to date. 

Following its earnings results, the team at Bell Potter released updated guidance on this ASX healthcare stock. 

Here is what the broker had to say. 

Commercial visibility 

Bell Potter acknowledged in its report that currently, most of this ASX healthcare stock’s income comes from government R&D incentives and grants, not from selling products.

However, this is expected to change over time as the company starts selling its technology commercially.

Importantly, it has signed its first major commercial agreement with IMV Technologies.

This deal is important because it validates Vitrafy Life Sciences’ technology and could lead to very large future revenue (over US$100m per year if widely adopted).

It’s important for prospective investors to be aware there is still risk, because the agreement needs to be expanded into a long-term deal.

If the partnership succeeds, it could be a turning point for the company.

Execution risk remains in moving to the long-term agreement, but assuming the partnership is consummated, the IMV partnership may prove to be the game changer the market is seeking. We assume a c.12% penetration across bovine / porcine segments (FY30e).

Upside remains in tact 

Bell Potter has maintained its speculative buy recommendation for this ASX healthcare stock. 

The broker has a price target of $2.25 on Vitrafy Life Sciences. 

From yesterday’s closing price of $1.62, this indicates an upside of 38.89%. 

Bell Potter said beyond the IMV partnership, this ASX healthcare stocks’ share price could be boosted by positive results from its Phase 2 US military trial, FDA approval of its Guardion medical device, and progress in commercialising its cryopreservation technology for Cell & Gene Therapy.

These events would signal that the technology is working, approved, and starting to generate real commercial interest.

The post Why this ASX healthcare stock is a speculative buy appeared first on The Motley Fool Australia.

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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.

Earlier this week, Pinnacle Investment Management Group Ltd (ASX: PNI) reported a half-year profit that had dipped a little.

This didn’t seem to deter investors in the stock, which bid the price up on results day, and it certainly hasn’t warned off the analyst team at Macquarie, which has an outperform rating on the stock and a bullish share price target.

An unexceptional profit

But first to the results, the company said net profit came in at $67.3 million, down 11% for the same period in 2024.

On the upside, the company said it had record net inflows of funds for the first half of $17.2 billion, with domestic retail inflows of $6.8 billion, domestic institutional inflows of $7 billion, and international inflows of $3.4 billion.

The company had cash and principal investments of $439.6 million at the end of the quarter.

Pinnacle also announced this week that it would buy the remaining 79.2% interest in Pacific Asset Management that it did not currently own for $418.8 million.

The company said that this agreement would accelerate its global growth, “with complementary distribution platforms to enhance geographic reach, affiliate origination, product innovation and expansion”.

Pinnacle declared an interim dividend of 29 cents per share, down 12% on the dividend for the same period last year.

Pinnacle Chair Alan Watson said re the result:

Our broad platform of affiliates and strategies, together with increasing presence in much larger addressable end markets, has underpinned a strong net flow outcome for the half, which will drive revenue growth in future periods. It is pleasing that all existing affiliates are profitable with revenues and core earnings continuing to build. Finally, we are delighted to welcome our nineteenth affiliate, Advantage Partners of Japan, and today announce further investment into Pacific Asset Management. We are confident that both of these growth initiatives will be to the benefit of our clients, people and shareholders.

Shares still looking cheap

Macquarie, in a research note sent to clients, said it was forecasting 18% compound annual growth for Pinnacle for the years out to 2030.

The analyst team said the business was well set up to grow, and added:

Pinnacle has an attractive organic growth outlook and potential to add accretive mergers and acquisitions. Outlook for organic performance is backed by net flows, performance fees, and operating leverage.

Macquarie has a 12-month price target of $25.25 on the stock, which, including the 3.5% dividend yield, would return shareholders 50.9% if achieved.

The post Which financial stock is Macquarie Tipping to return 50%? appeared first on The Motley Fool Australia.

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Motley Fool contributor Cameron England has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group and Pinnacle Investment Management Group. The Motley Fool Australia has positions in and has recommended Macquarie Group and Pinnacle Investment Management Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Westpac Banking Corp (ASX: WBC) shares have had a solid run, and for many investors it has done exactly what a big bank is supposed to do. It has paid dividends, offered stability, and benefited from a strong banking cycle. But looking ahead, I’m not convinced the risk-reward is especially compelling from here.

If I were choosing where to put new money today, I’d rather focus on blue-chip ASX shares with clearer growth runways and less reliance on the domestic credit cycle. These are three established, high-quality ASX names I’d choose instead.

ResMed Inc. (ASX: RMD)

ResMed is one of those rare ASX shares that is genuinely global, and that matters. The business operates in a large and growing market driven by ageing populations, rising obesity rates, and increasing awareness of sleep apnoea.

What really appeals to me is that ResMed’s growth is not dependent on economic conditions in Australia. Demand for sleep and respiratory devices is structural, not cyclical. Its recent results showed solid device growth, expanding digital health adoption, and improving margins.

Unlike a bank, ResMed is not constrained by regulatory capital rules or housing credit growth. It has the ability to reinvest heavily in innovation while still generating strong cash flow. For long-term investors, that combination is powerful.

Goodman Group (ASX: GMG)

Goodman is another blue-chip ASX share I’d rather own than Westpac shares.

Its focus on high-quality industrial property, logistics assets, and data centre infrastructure places it right in the middle of some of the most attractive long-term trends in global real estate. Ecommerce, supply chain reconfiguration, and cloud computing all require exactly the types of assets Goodman specialises in.

What sets Goodman apart is its development capability and global footprint. It is not just a passive landlord. It actively creates assets for customers, often alongside capital partners, which drives higher returns on equity over time.

In contrast to Westpac, Goodman’s growth is not tied to interest margins or mortgage volumes. It’s tied to long-term demand for infrastructure that underpins the modern economy.

Sigma Healthcare Ltd (ASX: SIG)

Sigma has quietly transformed itself over the past year, and I think the market is still adjusting to what the business has become.

The merger with Chemist Warehouse has created a vertically integrated healthcare group with scale across wholesale distribution, franchising, and retail. Pharmacy demand is resilient, supported by demographics and recurring consumer needs rather than economic cycles.

What I like about Sigma today is that it combines defensive characteristics with genuine operational upside. As integration benefits flow through and efficiencies are realised, earnings growth does not need bold assumptions to improve.

Compared to a major bank, Sigma offers exposure to healthcare demand rather than housing credit, and that diversification matters in a long-term portfolio.

Foolish takeaway

Westpac is not a bad business. But at this point in the cycle, I’d rather back blue-chip ASX shares with clearer growth drivers and less dependence on the domestic banking environment.

ResMed offers global healthcare growth, Goodman provides exposure to critical infrastructure, and Sigma brings defensive demand with improving fundamentals. For me, that’s a more attractive mix than simply adding more exposure to a major bank.

The post Instead of Westpac shares, I would buy these ASX blue chips appeared first on The Motley Fool Australia.

More reading

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• Buy, hold, sell: IAG, Mineral Resources, and Westpac shares

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 positions in and has recommended Goodman Group and ResMed. The Motley Fool Australia has positions in and has recommended ResMed. The Motley Fool Australia has recommended Goodman Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.