Tag: Stock pick

Accent Group Ltd (ASX: AX1) has been smashed.

The footwear and apparel retailer is trading at 55 cents at the time of writing, down around 70% from its 52-week high.

That sort of fall tells us the market has become deeply cautious about the outlook. I can understand why. Consumer spending has been under pressure, retail conditions have been difficult, and investors have not had much patience for discretionary shares.

But after such a large sell-off, I think Accent Group is worth a closer look.

A big fully-franked yield

The first thing that stands out is the potential income.

According to CommSec, the consensus estimate is for Accent Group to pay dividends per share of 4.2 cents in FY26, 6.2 cents in FY27, and 6.6 cents in FY28.

Based on a 55 cents share price, that would imply forward dividend yields of around 7.6%, 11.3%, and 12%, respectively.

Those dividends are expected to be fully franked.

That is a large potential income stream if the forecasts prove accurate. Of course, dividend estimates can change, especially for a retailer exposed to consumer demand. But the market appears to be pricing Accent as though a lot has already gone wrong.

If earnings stabilise and the dividend outlook holds up, the income case could look very attractive.

The valuation looks low

Accent Group also screens cheaply on earnings estimates.

CommSec’s consensus forecasts point to earnings per share of 6 cents in FY26, 8.8 cents in FY27, and 9.4 cents in FY28.

At 55 cents per share, that puts Accent on around 9 times FY26 earnings, just over 6 times FY27 earnings, and less than 6 times FY28 earnings.

That is not the valuation of a market favourite. It reflects genuine uncertainty. Investors are worried about consumer spending, margins, store performance, competition, and whether management can deliver on its improvement plans.

But I think that is where the opportunity may sit. A retailer does not need conditions to become perfect for a low valuation to start looking too harsh. It needs evidence that trading can improve, costs can be controlled, and earnings can recover.

A recovery plan is in motion

The third reason I am interested is that Accent Group is not standing still.

The company owns and operates a large portfolio of footwear and lifestyle banners, including The Athlete’s Foot, Platypus, Hype DC, Skechers, and Stylerunner. It also has exposure to global brands, owned brands, wholesale channels, and a large store network across Australia and New Zealand.

That gives Accent scale, customer data, landlord relationships, and brand access that many smaller retailers cannot match.

Its recent strategic update pointed to a plan built around efficiency, brand evolution, and expansion. That includes cost savings, store portfolio optimisation, The Athlete’s Foot franchise reacquisitions, and the rollout of Sports Direct across Australia and New Zealand.

There is execution risk here. Retail turnarounds can take time, and weak consumer conditions could keep pressure on the business for longer than expected.

But I like that Accent has several levers to pull. It can close weaker stores, improve costs, push stronger brands, expand promising formats, and benefit if shoppers become more confident again.

Foolish Takeaway

Accent Group will not suit investors who only want defensive earnings. This is a consumer-facing retailer, and the share price fall shows how quickly sentiment can turn when the market loses confidence.

But I think the current valuation and dividend forecasts are hard to ignore.

A fully-franked yield that could move into double digits, combined with a low earnings multiple and a credible recovery plan, makes this ASX dividend share look interesting to me.

The market is clearly worried. But if Accent Group can execute even reasonably well from here, today’s share price may end up looking too pessimistic.

The post Could this fully-franked ASX dividend share be too cheap to ignore? appeared first on The Motley Fool Australia.

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• Bell Potter tips nearly 300% upside for one of these ASX small-caps
• 3 ASX shares down 70% that could be cheap buys
• Morgans names 2 small-cap ASX shares to buy
• Morgans says these ASX dividend shares are buys

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

Owning Fortescue Ltd (ASX: FMG) shares has been a really good call for dividend income over the last several years.

The iron ore price is prone to quite sizeable swings, which can have a big impact on the size of Fortescue’s net profit and dividend.

In my view, the iron ore price has performed stronger than expected, with it sitting at around US$109 per tonne, according to Trading Economics, allowing the business to generate strong earnings in this financial year.

Let’s look at the dividend forecasts for the next few financial years.

FY26

The ASX mining share saw a solid performance in the first six months of the 2026 financial year. Revenue grew 10% to US$8.4 billion, net profit rose 23% to $1.9 billion and the dividend per share was hiked by 24% to 62 Australian cents.

Fortescue benefited from a 7% rise in the realised price for its hematite, while the production costs (C1 unit costs) fell by 3% – a powerful combination for profit growth.

How big could the FY26 annual dividend be?

The current forecast on Commsec suggests the business could deliver an annual dividend per Fortescue share of $1.03. That translates into a grossed-up dividend yield of 6.7%, including franking credits, at the time of writing.

FY27

However, while the 2026 financial year payout would be a solid dividend, experts are not certain that the dividend will continue to be as good.

In the 2027 financial year, the company is projected to pay an annual dividend per Fortescue share of 79.3 cents, according to the forecast on Commsec. That would represent a year over year reduction of 23% compared to the forecast for FY26.

The prediction for FY27 translates into a forecast grossed-up dividend yield of 5.2%, including franking credits, at the time of writing.

FY28

The 2028 financial year could be an even les rewarding year than FY27, with analysts pessimistic about the long-term direction of the iron ore price with increasing supply, particularly from Africa.

According to the projection on Commsec, the business is forecast to pay an annual dividend per Fortescue share of 66.8 cents. That would be a decline of 16% year over year. At the time of writing, the estimated payout translates into a grossed-up dividend yield of 4.3%, including franking credits.

Overall, this doesn’t seem like a great time to invest in Fortescue shares, in my opinion. The Commsec collation of 17 analyst ratings on the business says there’s currently eight sells, eight holds and just one buy.

There are better opportunities out there, in my view.

The post Here’s the dividend forecast out to 2028 for Fortescue shares appeared first on The Motley Fool Australia.

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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.

Brokers were as busy as ever this week updating their ratings and valuations for a good number of ASX shares.

Ten that were given the equivalent of buy ratings are listed below. Here’s what is being recommended:

Dicker Data Ltd (ASX: DDR)

In response to this computer hardware and software distributor’s trading update, Morgan Stanley has upgraded Dicker Data’s shares to an overweight rating with an improved price target of $11.00.

Eagers Automotive Ltd (ASX: APE)

This auto retailer released a trading update at its annual general meeting this week. In response, Macquarie retained its outperform rating on the ASX share with a trimmed price target of $27.10.

Goodman Group (ASX: GMG)

The team at Morgans was relatively pleased with this industrial property giant’s third-quarter update. In response to the update, the broker reiterated its buy rating with a $36.00 price target.

Guzman Y Gomez Ltd (ASX: GYG)

Ord Minnett is positive on this quick service restaurant operator’s decision to exit the US market. It responded to the news by retaining its buy rating with a $31.00 price target.

Life360 Inc. (ASX: 360)

Bell Potter was busy reviewing this location technology company’s quarterly update this week. It thinks the post-results selloff was an overreaction and has created a buying opportunity. This is especially the case given its strong growth in paying circles (paid subscribers). Bell Potter put a buy rating and $33.00 price target on Life360’s shares.

Liontown Ltd (ASX: LTR)

Over at UBS, its analysts are bullish on this lithium miner. This week, the broker retained its buy rating on Liontown’s shares with a $2.70 price target.

Mineral Resources Ltd (ASX: MIN)

This mining and mining services company announced the expansion of its Mt Marion lithium operation last week. Bell Potter was pleased with the plan and has retained its buy rating with an improved price target of $80.50.

Nufarm Ltd (ASX: NUF)

Morgans was pleased with this agricultural chemicals company’s half-year results and believes it is “on track to deliver strong underlying EBITDA growth in FY26.” As a result, the broker believes Nufarm shares are “materially undervalued” at current levels. It has put a buy rating and $4.15 price target on them.

Paladin Energy Ltd (ASX: PDN)

Macquarie has turned bullish on this uranium producer. This week, the broker upgraded the ASX uranium share to an outperform rating with a $13.25 price target.

Web Travel Group Ltd (ASX: WEB)

UBS responded to this travel technology company’s FY 2026 results by retaining its buy rating with a trimmed price target of $4.60. It felt the company delivered a solid result given the challenging finish to the year.

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

More reading

• I’d aim for $1 million in retirement buying just 10 ASX 200 shares
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Motley Fool contributor James Mickleboro has positions in Goodman Group, Life360, and Web Travel Group Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goodman Group and Life360. The Motley Fool Australia has positions in and has recommended Dicker Data and Life360. The Motley Fool Australia has recommended Eagers Automotive Ltd and Goodman Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

I do not think investors need dozens of holdings to build serious wealth over time.

Diversification is important, but there is also a point where a portfolio can become so crowded that the best ideas barely move the needle.

If I were aiming for $1 million in retirement using ASX 200 shares, I would keep the plan simple. I would try to own around 10 high-quality businesses, invest regularly, reinvest dividends, and give compounding as much time as possible.

Where to start

Let’s say an investor starts with $10,000 and adds $500 a month.

If that portfolio returned an average of 9% per annum, it could grow to more than $1 million in around 30 years.

That return is not guaranteed. Share markets do not move in a straight line, and some years can be painful. But I think the example shows why time, consistency, and reinvestment are so powerful.

The investor does not need to find the next tiny stock that rises 20-fold. They need a sensible plan and the discipline to keep going through different market conditions.

Why just 10 ASX 200 shares?

I would not want my retirement plan to depend on one or two companies. That is too much single-stock risk.

But I also do not think I need to own every company on the ASX.

Owning 10 carefully selected ASX 200 shares could give exposure to different sectors, earnings drivers, and growth opportunities without making the portfolio too diluted.

For example, a portfolio could include Commonwealth Bank of Australia (ASX: CBA) for banking quality and fully franked dividends, Macquarie Group Ltd (ASX: MQG) for global financial exposure, BHP Group Ltd (ASX: BHP) for resources and copper, and Wesfarmers Ltd (ASX: WES) for retail and industrial strength.

I would also want healthcare exposure through ResMed Inc (ASX: RMD) and CSL Ltd (ASX: CSL), digital infrastructure through Goodman Group (ASX: GMG), property platform exposure through REA Group Ltd (ASX: REA), enterprise software through TechnologyOne Ltd (ASX: TNE), and global technology through WiseTech Global Ltd (ASX: WTC).

That is not a perfect list for every investor. But it shows the sort of balance I would want.

What I’d look for

The share price is only one part of the decision.

If I were building a retirement portfolio, I would care more about the quality of the business than whether the stock looks cheap on the day I buy it.

I would want companies with strong competitive positions, capable management, durable demand, and the ability to keep reinvesting for growth.

Dividends would also matter. Over decades, reinvested dividends can make a huge difference. Fully franked income from some ASX 200 shares can also be useful, depending on an investor’s tax situation.

But I would not build the whole portfolio around yield. A retirement portfolio still needs growth.

Staying the course

The hardest part of this plan would not be choosing the 10 shares. It would be holding them through market falls.

Over 30 years, there will almost certainly be recessions, interest rate scares, earnings disappointments, commodity sell-offs, and company-specific problems.

That is normal. I would review the portfolio regularly, but I would not want to trade it constantly. The aim would be to own strong businesses for long enough that their earnings, dividends, and reinvestment have time to compound.

Foolish takeaway

A $1 million retirement portfolio can sound like a distant target, but it becomes more realistic when the plan is broken down.

I would start with quality, keep the portfolio focused, add money consistently, and let time do its work.

Ten ASX 200 shares will not remove every risk. But if they are chosen carefully and held patiently, I think they could form the backbone of a portfolio capable of building serious retirement wealth.

The post I’d aim for $1 million in retirement buying just 10 ASX 200 shares appeared first on The Motley Fool Australia.

More reading

• 10 ASX shares given buy ratings this week
• Passive income investors: Term deposits or ASX dividend stocks in 2026?
• Down 60%: 3 oversold ASX 200 shares to buy in June
• Historic: Here’s why CSL shares are looking very interesting right now
• 5 steps to bring in $1,000 per month in passive income

Motley Fool contributor Grace Alvino has positions in CSL, Commonwealth Bank Of Australia, and Wesfarmers. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL, Goodman Group, Macquarie Group, ResMed, Technology One, Wesfarmers, and WiseTech Global. The Motley Fool Australia has positions in and has recommended Macquarie Group, ResMed, and WiseTech Global. The Motley Fool Australia has recommended BHP Group, CSL, Goodman Group, Technology One, and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

For more than a decade, the Vanguard Australian Shares Index ETF (ASX: VAS) was the only choice for an investor looking for a cheap, established, reputable, and efficient ASX index fund that went beyond the scope of the S&P/ASX 200 Index (ASX: XJO).

There are many ASX index funds that cover the ASX 200 Index and meet the criteria listed above. One popular example is the iShares Core S&P/ASX 200 ETF (ASX: IOZ).

However, if an investor wanted to add some small-cap diversification by expanding into the S&P/ASX 300 Index (ASX: XKO), then Vanguard’s VAS was the only spot in town.

That all changed when provider Global X launched the Global X Australia 300 ETF (ASX: A300) last year. The admission of this ASX 300 index fund means that Australian index fund investors set on the ASX 300 index now have a genuine competition for their investing dollars.

So today, let’s dive into the pros and cons of both the VAS and A300 ETFs.

VAS vs. A300: Which SASX ETF comes out on top?

On the surface, these products seem almost identical. An investment in either index fund is effectively an investment in the same 300 shares, the largest 300 shares listed on the ASX, weighted by market capitalisation. Technically, VAS tracks the S&P/ASX 300 Index, while A300 follows the FTSE Australia 300 Index. But this is a ‘tomato, tomato’ situation in practicality.

Your money is essentially going towards the same 30 companies, with the lion’s share ending up with the likes of Commonwealth Bank of Australia (ASX: CBA), BHP Group Ltd (ASX: BHP) and the other large-caps of the ASX.

The only real point of differentiation between VAS and A300 is the fee. Both index funds charge relatively cheap and competitive fees by ASX standards. VAS is the more expensive of the two, asking 0.07% per annum. That’s $7 a year for every $10,000 invested. A300 undercuts this, charging 0.04% per annum ($4 per year for every $10,000 invested). Although that is a small difference, it is not negligible, and may sway some investors to pick A300.

There is one more caveat to mention, though. VAS is the established player here, with more than $24 billion in funds under management. In contrast, A300 is an upstart and currently only has a little over $12 million in its bank.

That’s typical of an ETF that is less than a year old. However, it still might give some investors pause. There’s never a risk to existing investors if a fund has low investment. However, it does indicate that the fund is probably running at a loss for its provider, given that ultra-low fee. The risk is that A300 doesn’t end up attracting enough capital to make itself economically viable and closes after a time.

If that does happen, investors will not lose their capital. However, they may be forced to liquidate their ETF units.

Aside from this risk, there is little reason to opt for the lower fee A300 offers. Plenty of investors may just choose to stick to the beloved Vanguard brand regardless, though.

The post ASX index funds: Is VAS or A300 the better choice? appeared first on The Motley Fool Australia.

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• How to build a $150,000 ASX share portfolio from scratch

Motley Fool contributor Sebastian Bowen has positions in Vanguard Australian Shares Index ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Picking winners in the clean energy sector is a difficult thing to do.

Solar panel manufacturers, wind turbine developers, electric vehicle companies, and battery storage businesses all move in different cycles and carry very different risk profiles.

For investors who want broad exposure to the clean energy transition without the risk of backing the wrong horse, the Betashares Climate Change Innovation ETF (ASX: ERTH) offers a simple and diversified solution.

What ERTH actually holds

ERTH tracks an index of up to 100 leading global companies that derive at least 50% of their revenues from products and services that reduce or avoid carbon emissions.

That definition is broad, capturing clean energy providers, green transport companies, energy efficiency businesses, waste management innovators, sustainable food producers, and energy storage specialists.

Top holdings include Vertiv Holdings, Bloom Energy, ABB, and ASML.

Investors therefore have exposure to companies operating across the entire clean energy value chain rather than any single technology.

The fund charges a management fee of 0.65% per annum and pays distributions annually.

Why the investment case is strengthening

The macro backdrop behind ERTH has rarely been more supportive.

The International Energy Agency estimates that global energy investment exceeded US$3 trillion in 2024, with roughly two-thirds directed towards clean energy, electrification, grids, and storage.

In its own research, Betashares has stated:

Climate technology should no longer be viewed as a discretionary or thematic allocation. The physical impacts of climate change are increasingly being felt and have material economic consequences, and the transition is increasingly underpinned by energy system economics rather than environmental policy alone.

The performance picture

ERTH had a difficult 2025, falling alongside the broader clean energy sector as higher interest rates weighed on growth-oriented and capital-intensive businesses.

That pullback has created a more attractive entry point for long-term investors.

ERTH’s one-year return is approximately 24%, recovering strongly from its late 2025 lows as rate cut expectations returned to global markets and clean energy sentiment improved.

The risks worth knowing

ERTH is not a defensive investment.

The fund carries meaningful volatility, and the clean energy sector remains sensitive to interest rate movements, government policy changes, and commodity price fluctuations.

The US’ rollback of several US clean energy incentives in 2025 weighed on parts of the portfolio, and investors should factor in the possibility of further policy headwinds in the United States.

Currency risk is also present, as the fund’s underlying holdings are denominated in US dollars and other foreign currencies.

Foolish takeaway

The clean energy transition is a multi-decade investment theme, and ERTH gives Australian investors a diversified, low-friction way to participate in it from a single ASX trade.

For investors who believe the energy system is being permanently rewired toward cleaner sources and want broad exposure to that shift without picking individual companies, ERTH is worth serious consideration.

The post Why this ASX ETF could be the simplest way to play the global clean energy boom appeared first on The Motley Fool Australia.

More reading

• 3 of the hottest thematic ASX ETFs for investors to target this week 
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Motley Fool contributor Mark Verhoeven has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended ASML, Abb, Bloom Energy, and Vertiv. The Motley Fool Australia has recommended ASML. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This week, ASX energy stock Amplitude Energy Ltd (ASX: AEL) announced a major acquisition of a project from Beach Energy Ltd (ASX: BPT) causing brokers to review their expectations for the company’s shares.

The analyst teams at both Macquarie and Bell Potter have upgraded their price targets for the company on the back of the deal, which we’ll look at shortly.

First, let’s have a closer look at the deal.

Major gas resource purchased

Amplitude announced that it would acquire 50% of the Artisan gas resource in the Offshore Otway Basin, with the project to feed into Amplitude’s East Coast Supply Project (ECSP).

The company will pay Beach Energy $58.3 million plus a royalty of $3.75 per gigajoule of gas produced, capped at 62 petajoules.

Amplitude Managing Director Jane Norman said the deal would accelerate the production of Artisan’s resource and improve the economics of the ECSP.

She added:

Producing Artisan through Amplitude Energy’s existing infrastructure allows faster and lower-cost development of this gas for the east coast domestic market. Artisan development costs will significantly benefit from leveraging the existing ECSP program and our readily-available infrastructure. This is a win-win for Amplitude, O.G. Energy and Beach with respect to optimising our respective Otway Basin positions.   

O.G. Energy will acquire another 10% of Artisan as part of the deal to become a 50% holder in the resource.

Ms Norman said Amplitude expected to move rapidly to a final investment decision on the development phase of the ECSP over the next few months while the drilling of the Annie and Juliet wells is conducted.

She added:

Annie and Artisan together provide the base resource for the ECSP, with project economics potentially further improved by Juliet and/or Nestor discoveries. This transaction provides significant value and optionality for the ECSP and provides customers with certainty in an uncertain market

Shares looking cheap

Bell Potter said in a research note to clients this week that the deal derisks the ECSP through adding scale and reducing the reliance on exploration success at Juliet and Nestor.

They said:

Artisan more than doubles ECSP gas reserves, enabling 60TJ/day gross production over an initial 5-year period. With the ECSP expected to produce from 2H 2028, there are no changes to our earnings estimates. Our valuation is upgraded on lower risking assumptions.

Bell Potter has upgraded its price target for Amplitude shares from $2.70 to $2.90. This materially above Wednesday’s close price of $1.76.

Macquarie also ran the ruler over the deal, and said they now had greater confidence in Amplitude being able to produce 90 terajoules per day through its Athena gas plant in 2028.

They added:

We continue to believe AEL is oversold following disappointing drilling outcomes; adding Artisan to the ECSP increases project certainty (irrespective of drilling outcomes at Juliet & Nestor), strengthening the pathway to CY28 growth.

Macquarie increased its price target to $3 per share.

The post 2 brokers have tipped this ASX energy stock to jump by more than 60% 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. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Defensive ASX dividend shares can be useful when the market feels uncertain.

I do not expect them to be exciting every year. I want businesses with strong market positions, reliable demand, and the ability to keep paying income through different parts of the cycle.

Three ASX dividend shares I would buy and hold are named in this article.

Telstra Group Ltd (ASX: TLS)

The first defensive ASX dividend share I like is Telstra.

Telstra owns essential telecommunications infrastructure and provides mobile, internet, and connectivity services to millions of Australians.

That gives it a defensive quality I find attractive. People may cut back on some discretionary spending when budgets are tight, but mobile and internet access are close to essential for households and businesses.

I also like Telstra’s mobile network position. The company has invested heavily in its network over many years, and that remains a key competitive advantage.

This does not mean Telstra is risk-free. Competition, regulation, capital spending, and technology shifts can all affect the business. But I think its earnings base is more resilient than many other ASX shares.

For income investors, Telstra’s fully franked dividends are a major attraction. The dividend yield may not always be the highest on the market, but I think the combination of income, franking, and defensive demand makes it a strong dividend holding.

Coles Group Ltd (ASX: COL)

Another ASX dividend share I would buy and hold is Coles.

Supermarkets are not immune from pressure. Costs can rise, competition can be intense, and shoppers are always looking for value.

But food and household essentials are still repeat-purchase categories. That gives Coles a level of demand resilience that many businesses do not have.

I also think Coles has several ways to keep improving over time. Private label, loyalty, online grocery, supply chain investment, and store productivity can all help the business defend margins and serve customers more efficiently.

In an uncertain economy, I think value becomes even more important. Coles has the scale and brand strength to compete for household spending while still generating cash flow.

Transurban Group (ASX: TCL)

The third ASX dividend share I would consider is Transurban.

Transurban owns toll road assets in major urban areas. These are long-life infrastructure assets that can generate cash flow over many years.

I like the toll road model because it is linked to transport demand, population growth, and urban congestion. Traffic can move around in the short term, but over long periods, well-located road networks can remain highly valuable and support growing distributions.

There are risks. The company carries debt, and higher interest rates can affect infrastructure valuations. Traffic levels, regulation, project costs, and political pressure can also influence returns.

But I think Transurban still has attractive defensive qualities. Its assets are difficult to replicate, and its income profile can appeal to investors looking beyond traditional bank dividends.

Foolish takeaway

Defensive dividend shares do not need to be exciting to be useful.

For a long-term income portfolio, I think the key is owning businesses that can keep generating cash even when the economic backdrop becomes less friendly. These three ASX shares are exposed to different parts of everyday life, which is what makes the mix appealing to me.

They will not remove risk from a portfolio, and dividends are never guaranteed. But for investors wanting income, resilience, and a little more balance, I think they could be shares worth holding for years.

The post 3 defensive ASX dividend shares I’d buy and hold appeared first on The Motley Fool Australia.

More reading

• Passive income investors: Term deposits or ASX dividend stocks in 2026?
• 3 of the best ASX dividend shares to buy in June
• Why are Telstra shares falling and should investors be concerned?
• 2 ASX dividend shares I’d buy for reliable passive income
• Why Telstra and these ASX dividend shares could be top buys for income

Motley Fool contributor Grace Alvino has positions in Transurban 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 Telstra Group and Transurban Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

I think exchange-traded funds (ETFs) can be a great way to build a portfolio from scratch, especially on a budget.

With just a few ASX ETFs, investors can gain exposure to different countries, sectors, and investment styles without needing to pick every company individually.

Three ASX ETFs I think could work well in a fresh portfolio are named in this article.

iShares S&P 500 AUD ETF (ASX: IVV)

The first ASX ETF I would consider is the iShares S&P 500 AUD ETF.

The IVV ETF gives investors exposure to 500 of the largest companies listed in the United States. These are businesses with global brands, large customer bases, strong balance sheets, and the ability to reinvest heavily in growth.

What I like about this fund is that it adds exposure to areas that are less represented locally, including mega-cap technology, software, digital advertising, semiconductors, and global healthcare.

The S&P 500 will still have weak years. It can fall sharply when markets become nervous. But for a long-term portfolio, I think low-cost exposure to America’s biggest companies is a very strong starting point.

Vanguard FTSE Asia Ex-Japan Shares Index ETF (ASX: VAE)

The second ASX ETF I would look at is the Vanguard FTSE Asia Ex-Japan Shares Index ETF.

The VAE ETF adds something different. It gives investors exposure to Asian markets outside Japan, including economies that can offer a different growth profile to Australia and the United States.

I think this is useful because a portfolio built only around Australia and the US can still miss some important parts of the global economy.

Asia is home to large consumer markets, rising middle-class wealth, technology platforms, manufacturing strength, and long-term economic development.

This ETF is not without risk. Asian markets can be volatile, currency movements can affect returns, and some markets carry higher political and regulatory risk. But I think the risk/reward here is attractive and makes it a great option for a balanced portfolio.

Betashares Australian Quality ETF (ASX: AQLT)

The third ASX ETF I like is the Betashares Australian Quality ETF.

The AQLT ETF gives investors exposure to Australian shares with quality characteristics. Instead of simply owning the broad market, it tilts towards businesses with stronger financial metrics.

A quality-focused ETF can help investors own a more selective slice of the local market. This could include companies with stronger profitability, more resilient earnings, or better balance sheet characteristics than the average ASX share.

It is not a guarantee of outperformance, but I think it could stack the odds in your favour.

Overall, I believe the AQLT ETF could sit alongside broader global exposure and provide a more disciplined way to own Australian shares.

Foolish takeaway

A fresh portfolio does not need dozens of holdings to be sensible. I think the priority is getting broad exposure, keeping costs reasonable, and avoiding too much reliance on one market.

These three ETFs would not be perfect every year, but together they could give investors a simple foundation across global leaders, Asian growth, and quality Australian shares.

The post 3 ASX ETFs I’d buy to build a portfolio from scratch appeared first on The Motley Fool Australia.

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• This ASX bank ETF has a 5.2% dividend yield right now
• How I’d invest $20,000 in ASX shares before the end of FY26
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• 5 years ago, $10,000 bought 274 iShares S&P 500 ETF (IVV) units. But how many would it buy now?
• Got $50k of savings? Here’s how I’d turn that into passive income of $10k a year

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 iShares S&P 500 ETF. The Motley Fool Australia has recommended 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.

The investing landscape looks quite different in 2026 than what ASX investors have become used to in recent years. Sure, we have seen the markets hit new all-time highs as recently as February. But that doesn’t mean it is plain sailing going forward, particularly for passive income investors.

Dividends have always been a major drawcard for investing in the Australian stock market. However, the run that the S&P/ASX 200 Index (ASX: XJO) has been on over the past two years or so has had the less desirable effect of lowering the dividend yields available from many popular ASX dividend stocks. Before 2020, for example, it would have been rare to see Commonwealth Bank of Australia (ASX: CBA) shares on a yield under 4%. Ditto with Telstra Group Ltd (ASX: TLS) or even Coles Group Ltd (ASX: COL). These days, it’s rare to see these stocks get close to 4%.

At the same time, interest rates have climbed to levels Australians haven’t seen for 15 years. The zero-rate world of COVID is most certainly behind us.

So dividend yields are down, and ‘safe’ cash investment interest rates are up. That leaves the passive income investors on the ASX in quite the pickle.

Where to invest for passive income in 2026?

Well, that’s the $64,000 question. There are a few factors investors need to contemplate before finding the solution that works for them.

The first, and arguably most important, of these factors is risk tolerance. Many passive income investors, particularly retirees, wish to preserve their capital as a priority. If that is the case, then having the majority of one’s investable capital invested in safe cash assets like term deposits is arguably a sound strategy. A few years ago, term deposits would get you 1% or 2% if you were lucky. But with the cash rate now at 4.35% (and perhaps set to rise even further), term deposits, or even savings accounts, with interest rates approaching 5.5%, are not uncommon.

Getting a 5.5% yield that comes with a government guarantee of capital protection (there are conditions to that) is certainly not something to turn one’s nose up at. Particularly if capital protection is a major concern.

Saying that, term deposits are still term deposits. For one, they don’t come with that added bonus of franking credits. The value of a fully franked dividend can push the grossed-up yield of a dividend stock from 3.5% to 5%. For another, just as they allow no downside risk, there’s no potential for capital returns either. Despite inevitable volatility, a good ASX dividend stock can be expected to appreciate in value over time, while spinning off dividend income. A term deposit’s capital, in contrast, will never appreciate.

The price of safety

That’s the other factor passive income investors need to accommodate. ASX shares have always outperformed cash investments over long periods of time, as the data has always shown. Investors need to accept that the price of capital protection is lower returns, even if interest rates are relatively high.

Of course, for some passive income investors, that protection is worth forgoing the potential of higher returns. But that won’t be optimal for all investors. At the end of the day, each passive income seeker needs to weigh up their own goals and tolerances, and decide which investment (or combination) is the right fit for them and their personal circumstances.

The post Passive income investors: Term deposits or ASX dividend stocks in 2026? appeared first on The Motley Fool Australia.

More reading

• 3 of the best ASX dividend shares to buy in June
• Historic: Here’s why CSL shares are looking very interesting right now
• Why are Telstra shares falling and should investors be concerned?
• 3 ASX financial shares to buy: experts
• Investors are celebrating yesterday’s inflation news. Here’s how it might impact ASX financial stocks

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