Tag: Stock pick

A new report from Betashares has outlined the current shift taking place in the world of climate technology. 

According to the report, it has previously been framed as an innovation story built on novel solutions, venture capital funding rounds and the promise of disruption.

However, it has now moved decisively into its execution phase.

According to Vinnay Cchoda Manager – Responsible Investments at Betashares, this marks a structural shift. 

Climate technology is no longer a niche growth theme but a key constituent of the infrastructure and capital investment cycle underpinning the global economy.

What is climate technology?

Climate technology refers to the tools, systems, and processes used to reduce greenhouse gas emissions and adapt to the impacts of climate change. 

It also includes things like renewable energy (solar, wind), energy storage, electric transport, smart grids, and low-carbon industrial processes.

More broadly, it now covers the infrastructure and technologies needed to transform how energy is produced, distributed, and used.

This is along with solutions for resilience, such as water management and climate-resilient materials.

Investment and application growing

In yesterday’s report from Betashares, the ASX ETF provider said the case for climate technology has strengthened in recent times. 

The physical impacts of climate change are increasingly being felt and have material economic consequences.

The Intergovernmental Panel on Climate Change (IPCC) confirms that human-induced climate change has increased the frequency and intensity of extreme heat, heavy rainfall and drought across most regions – raising risks to infrastructure, food systems and productivity.

At the same time, the transition is increasingly underpinned by energy system economics rather than environmental policy alone. 

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

In that context, climate technology should no longer be viewed as a discretionary or thematic allocation. It represents a structural response to tightening physical constraints and a reconfiguration of the global energy and industrial system.

How to gain exposure

For investors looking for exposure to climate tech the Betashares Capital Ltd – Betashares Climate Change Innovation ETF (ASX: ERTH) is worth considering. 

It provides exposure to a portfolio of global companies positioned to benefit from climate change mitigation and adaptation. 

Importantly, this exposure includes early-stage innovators and established companies with scale, robust balance sheets and global revenue bases.

As climate technology becomes increasingly embedded in mainstream capital expenditure and infrastructure cycles, a diversified listed exposure offers a way to participate in the transition without relying on the success of any single technology or policy outcome.

The post The compelling case for investing in this climate tech ASX ETF appeared first on The Motley Fool Australia.

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• Up over 70% in a month, is it too late to buy Zip shares?
• 3 excellent Vanguard ETFs for Australian investors in 2026
• Forget Westpac shares, I’d buy these ASX dividend stocks
• 3 reasons I’d invest $5,000 in the iShares S&P 500 IVV ETF

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.

There are lots of exchange-traded funds (ETFs) available from Vanguard for Australian investors to choose from, covering everything from broad market exposure to more targeted sectors.

With so many options on offer, I think it could make sense to focus on funds that tap into major global markets and long-term growth trends, while still providing diversification.

Here are three Vanguard ETFs I think stand out for Australian investors in 2026.

Vanguard Global Technology Index ETF (ASX: VTEK)

The VTEK ETF offers Aussies a targeted way to invest in one of the most influential sectors in the global economy.

Technology continues to shape how businesses operate and how consumers interact with products and services. Areas such as artificial intelligence (AI), cloud computing, and digital platforms are still expanding, and the companies leading these trends are continuing to invest heavily.

This ETF provides exposure to around 300 global technology stocks, giving investors access to a wide range of businesses across developed and emerging markets. It is also structured with caps on individual holdings, which helps manage concentration risk.

The recent tech selloff has made valuations more attractive in this part of the market. And with long-term drivers still in place, now could be a good time to consider this ETF.

Vanguard S&P 500 ETF (ASX: V500)

The V500 ETF is one of the simplest ways for Aussies to gain exposure to the US market.

It tracks the S&P 500 index, which includes 500 of the largest listed companies in the United States. These businesses operate across sectors such as technology, healthcare, industrials, financials, and consumer goods.

What I like about this ETF is the balance it provides. It offers exposure to high-quality stocks with strong earnings power, while also spreading that exposure across a broad range of industries.

Over time, the US market has been a consistent driver of global returns, supported by innovation and scale. I believe this can continue over the long term.

For Australian investors, the Vanguard S&P 500 ETF also provides diversification away from the local market, which is more concentrated in financials and resources.

Vanguard All-World ex-US Shares Index ETF (ASX: VEU)

The VEU ETF complements US exposure by covering the rest of the world.

It includes holdings across Europe, Asia, and other regions (except the US). This creates access to economies that are growing at different rates and driven by different factors.

That diversification can be valuable over time. Different regions can perform well at different stages of the cycle, and the Vanguard All-World ex-US Shares Index ETF captures that variation across a large number of companies and industries.

It also provides exposure to emerging markets, which can add another layer of growth potential as those economies continue to develop.

Foolish takeaway

When investing in ETFs, I think it makes sense to combine exposures that can work together over time.

The VTEK ETF provides access to long-term technology trends, the V500 ETF offers broad exposure to leading US companies, and the VEU ETF adds diversification across the rest of the world.

Together, they create a simple framework that can capture growth across multiple regions and sectors, which is what I look for when investing for the long term.

The post 3 excellent Vanguard ETFs for Australian investors in 2026 appeared first on The Motley Fool Australia.

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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 Vanguard International Equity Index Funds – Vanguard Ftse All-World ex-US ETF. 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.

Westpac Banking Corp (ASX: WBC) shares have had a strong run, and I think that is now being reflected in its valuation.

At current levels, I don’t see a lot of upside. The dividend is still there, but the starting point looks less attractive to me than it did a year ago.

That is why I would be looking elsewhere for income right now.

Here are three ASX dividend stocks I would buy instead.

Harvey Norman Holdings Ltd (ASX: HVN)

Harvey Norman slipped to a 52-week low this week, which is where it starts to get interesting.

Retail has been under pressure as interest rates rise, and that has weighed on the share price. But this is a business with a long track record and a strong brand in Australia and overseas.

What I like here is the asset backing. The company owns a large property portfolio, which adds another layer to the investment case beyond retail earnings.

At this lower share price, its dividend yield is forecast to be over 8% in FY27 according to CommSec, which is why I think it is worth a closer look for income-focused investors.

Nick Scali Ltd (ASX: NCK)

Nick Scali is down close to 40% from its 52-week high, reflecting concerns over softening conditions in the furniture retail market.

Even so, the business has been through these cycles before.

It has a focused model, strong margins, and a history of managing inventory and costs well. That tends to support profitability even when conditions are softer.

With the share price well below previous levels, I think its forecast 5% dividend yield (according to CommSec) and potential for a recovery make this one stand out.

Lottery Corporation Ltd (ASX: TLC)

Lottery Corporation offers something different as an ASX dividend stock.

It hasn’t seen the same kind of pullback as the others, but it provides a steady income stream backed by a defensive business model.

Demand for lottery products tends to hold up well across different conditions, which supports consistent cash flow and dividends.

With a yield around 3%, it adds a level of stability to an income portfolio, which I think is worth having alongside more cyclical names.

Foolish takeaway

Westpac still offers income, but I think the current valuation leaves less room for upside.

These three ASX dividend stocks offer a different mix. Harvey Norman and Nick Scali bring recovery potential at lower share prices, while Lottery Corporation provides steady income backed by a more defensive model.

That balance is what I would be looking for right now.

The post Forget Westpac shares, I’d buy these ASX dividend stocks appeared first on The Motley Fool Australia.

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

When I think about long-term investing, I look for exposures that are simple, scalable, and supported by strong underlying markets.

That is why the iShares S&P 500 ETF (ASX: IVV) continues to stand out to me as a compelling option.

Here are three reasons I would consider investing $5,000 into this exchange-traded fund (ETF) today.

Access to the world’s most influential companies

The IVV ETF provides exposure to the S&P 500 Index (SP: .INX), which includes many of the largest and most influential companies in the world.

These businesses operate across technology, healthcare, finance, and consumer sectors, and they play a central role in the global economy.

This includes Apple, Nvidia, Microsoft, McDonald’s, and Tesla.

What I find compelling is how these companies continue to evolve.

They invest heavily in innovation, expand into new markets, and build platforms that reach billions of people. Over time, that can support strong earnings growth and long-term returns.

For me, the iShares S&P 500 ETF offers a way to access that group of companies in a single investment.

A history of long-term growth

The US market has delivered strong long-term returns over many decades.

That performance has been driven by a combination of innovation, productivity, and the ability of companies to scale globally.

The IVV ETF captures that dynamic.

It provides exposure to a market that continues to lead in areas such as technology, healthcare, and capital markets. That leadership can translate into ongoing growth over time.

For investors focused on the long term, I think that track record is an important part of the story.

Diversification and low-cost access

Another reason I like the IVV ETF is its diversification and low fees.

It provides exposure to 500 companies across a wide range of industries, which creates a broad and balanced portfolio within a single investment.

That diversification helps spread exposure across sectors, which means each can contribute to returns at different points in the cycle, which can support more consistent long-term outcomes.

Cost is another key part of the appeal. The iShares S&P 500 ETF comes with a very low management fee of 0.04%, which allows more of the underlying returns to stay with investors over time. Over long periods, that can make a meaningful difference to overall performance.

I think this combination of diversification and low-cost access is what makes the ETF such an efficient long-term investment.

Foolish Takeaway

The IVV ETF offers exposure to some of the most influential companies in the world, backed by a long history of growth and a simple, low-cost structure.

For me, it is an ETF that I think could form a strong foundation for long-term investing, supported by the strength and scale of the US market.

The post 3 reasons I’d invest $5,000 in the iShares S&P 500 IVV ETF appeared first on The Motley Fool Australia.

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• The biggest ASX ETFs revealed – are they still 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 positions in and has recommended Apple, Microsoft, Nvidia, Tesla, and iShares S&P 500 ETF and is short shares of Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2028 $320 calls on McDonald’s and short January 2028 $340 calls on McDonald’s. The Motley Fool Australia has recommended Apple, Microsoft, 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.

ASX dividend shares are a fantastic way for Australian investors to earn a passive income, while lowering portfolio volatility.

Rather than chasing high-risk growth, the right ASX dividend share will give you an income, some relative stability, and also potential for compounding growth.

Here are two reliable, high-yield ASX dividend shares that could be a great addition to any portfolio.

GQG Partners Inc (ASX: GQG)

GQG is a global boutique asset management company focused on active equity portfolios. It offers investment advisory and portfolio management services for pension funds, sovereign funds, wealth management companies, and individual investors across three continents.

Earlier this month, GQG reported a challenging quarter due to heightened market volatility and ongoing geopolitical risk. The company reported FUM of US$162.5 billion as at 31 March 2026. This included net outflows of US$8.6 billion for the quarter.

But GQG said its defensive investment positioning, favouring companies with stable earnings and strong fundamentals, helped all major strategies outperform benchmarks.

The funds management giant has historically paid four unfranked dividends per year to its shareholders, in March, June, September and December.

Most recently, GQG paid a final unfranked dividend of US$0.0357 to investors last month. Full-year dividends declared were US$0.1469 per share, a 7.5% increase from the previous year. At the time of writing, this translates to a dividend yield of around 12%.

The company is also expected to provide shareholders with a dividend yield of around 11% in FY26 and FY27.

IPH Ltd (ASX: IPH)

IPH provides intellectual property (IP) services through a network of global brands. The group operates across ten jurisdictions in 25 countries, including Australia, New Zealand, Southeast Asia, and the US, which makes it the largest IP services provider in the Asia-Pacific region. 

Its services cover everything from patent filing and trademarks to prosecution, portfolio management, and enforcement. 

The ASX dividend company has a long history of consistently generating a strong cash flow from its operations. For example, the company reported cash conversion of 101% in its first-half FY26 results.

It is this strong cash flow that has enabled the company to be an established and reliable dividend payer. The company has also been able to increase its dividend over time.

IPH pays two partially or fully-franked dividends a year, in March and September.

IPH paid an interim partially-franked dividend of 19 cents per share last month and is expected to pay fully-franked dividends of 38 cents per share in FY26. That translates to a dividend yield of around 11% at the time of writing.

IPH is expected to increase its dividend payment to 39 cents per share in FY27. This impliesa higher dividend yield of around 12%. 

The post 2 ASX dividend shares yielding 11% or even more appeared first on The Motley Fool Australia.

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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 recommended Gqg Partners and IPH Ltd. 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 peaked at an all-time high of $42.95 in mid February, and they’ve fluctuated ever since. 

Solid profits, dividend appeal, and cost-cutting efforts have helped push the share price higher at times. But Westpac has also suffered headwinds from ongoing global uncertainty, interest rate hikes, and inflation concerns.

After the peak, Westpac shares tumbled 9%, they then reversed and gained over 8% in the first 10 days of April. Since then, it looks like investor sentiment has turned again and the ASX bank stock has shed nearly all gains to the time of writing.

Despite broad share market uncertainty, and a rollercoaster share price, I still think there are compelling reasons for investors to add Westpac shares to their portfolio.

Here are three of them.

1. It’s a defensive ASX stock

Westpac, like many other ASX bank stocks, is considered a defensive stock because it can remain relatively stable, even when the economy slows down. The bank provides a broad range of consumer, business, and institutional banking and wealth management services like mortgages, loans, and savings accounts. Australians need these services on a daily basis regardless of what state the economy is in. What’s more, investors often rotate into defensive assets in volatile markets, which means Westpac is able to actually benefit from instability elsewhere in the index.

2. Solid earnings and good growth momentum

Because Westpac is a defensive asset which is able to create consistent revenue and predictable earnings, even in a downturn.Westpac posted its first-quarter results in February. The bank reported a 5% increase in unaudited statutory net profit and a 6% increase in net profit excluding notable items. Westpac CEO Anthony Miller said, “We are optimistic on the outlook for the economy and expect demand for both business and household credit to remain resilient.” The bank posed an update saying that geopolitical uncertainty and higher market volatility has begun to flow through to the bank’s earnings. Westpac said it expects a $75 million reduction to its NPAT in the first half of FY26. But, beyond that one-off cost, the bank confirmed that its underlying business update looks relatively steady.

3. Westpac shares pay a reliable dividend

Because of Westpac’s defensive nature and consistent earnings, it can pay an attractive dividend to its investors. Westpac typically pays dividends twice per year. The bank most recently paid a fully franked final dividend of 77 cents per share to investors in December. For FY25, the bank paid a total of $1.54 per share, which equates to a dividend yield of 3.85% at the time of writing. This is forecast to increase to $1.605 per share in FY26, and again to $1.64 per share in FY27.

The post 3 reasons to buy Westpac shares today appeared first on The Motley Fool Australia.

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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.

There is a moment that tends to arrive somewhere in your early 50s. 

Retirement stops feeling abstract and starts feeling real.

At 50, you are no longer a young investor with endless runway. But you are also not out of time. You are in the middle ground: close enough to see the finish line, but still with meaningful time to shape how you get there.

So the question is worth asking directly: if you are a typical 50-year-old Australian, is your super balance enough?

What does the average 50 year-old have in super?

According to data from the Association of Superannuation Funds of Australia (ASFA) and the Australian Bureau of Statistics, Australians in their early 50s typically have super balances ranging from about $180,000 to $230,000 for women and $250,000 to $300,000 for men, depending on the source and exact age bracket.

For the sake of simplicity, let us use a rough midpoint of $250,000 for a single person in their early 50s.

That is a meaningful amount of money. But it may still be well short of what is needed for a comfortable retirement.

What does a comfortable retirement cost?

ASFA defines a comfortable retirement as one that supports a good standard of living. That includes regular leisure activities, a reasonable car, private health insurance, occasional domestic travel, and the ability to handle unexpected home repairs without serious stress.

To fund that lifestyle, ASFA estimates a single person needs about $54,840 per year, while a couple needs around $77,375 combined. To support that level of spending through retirement, the suggested lump sum is roughly $630,000 for singles and $730,000 for couples.

Those figures assume you own your home outright and become eligible for a partial Age Pension from age 67.

The gap is meaningful, but not hopeless

If you have around $250,000 in super at age 50, that leaves a gap of roughly $380,000 to reach the benchmark for a comfortable retirement as a single.

That is significant. But it is not a disaster.

You may still have 15 to 17 years of working life ahead of you. Employer contributions should continue. Investment returns still have time to compound. And the decisions you make over the next decade can materially change the outcome.

The real issue is not simply being below the benchmark. It is the risk of arriving at retirement with only the minimum and no buffer.

Why aiming for the benchmark alone can be risky

Retirement benchmarks are useful, but they should be viewed as a floor, not a ceiling.

A single person retiring with exactly $630,000 may have enough on paper. But that assumes investment returns cooperate, inflation behaves, healthcare costs stay manageable, and the Age Pension remains accessible and supportive.

Life rarely lines up that neatly.

That is why there is value in building beyond the benchmark where possible. A balance of $700,000 or $750,000 may not transform your lifestyle, but it can create breathing room when markets disappoint or unexpected costs arise.

Think of it as a margin of safety. The people who retire with the most confidence are often not those who hit the number exactly. They are the ones who gave themselves some room for error.

Your 50s can be your strongest decade for super growth

This is the part many people overlook: your 50s can be one of the most powerful decades for building superannuation wealth.

Income is often near its peak. The mortgage may be shrinking or gone. And your balance is finally large enough for compounding to become meaningful in dollar terms. A 7% return on $250,000 adds $17,500 in a year before any new contributions are made.

That combination matters.

The levers that can still make a difference

At 50, there are still several meaningful ways to improve your outcome.

Concessional contributions remain one of the most tax-effective tools available. The annual cap is $30,000. If your balance is under $500,000 and you have unused cap amounts from previous years, the carry-forward rules may allow you to contribute more.

Investment allocation also matters. Many people become more conservative as retirement approaches, sometimes too early. At 50, you may still have more than a decade before needing to draw on your super, so reviewing whether your allocation still supports long-term growth can be worthwhile.

Fees are quieter, but still important. Even a small difference in annual fees can compound into tens of thousands of dollars over time.

The takeaway is simple. Having less than the retirement benchmark at 50 is not a reason to panic, but it is a reason to act. The window for meaningful progress is still open, and the decisions made now may matter more than any that came before.

The post Could you comfortably retire with the average superannuation of a 50-year-old in 2026? appeared first on The Motley Fool Australia.

More reading

• 2 ASX dividend shares yielding 11% or even more
• 3 reasons to buy Westpac shares today
• $5,000 invested in Droneshield shares 5 years ago is now worth…
• How to build a second income from ASX shares without taking big risks
• Wondering which ASX ETFs to buy? Try these top picks

Motley Fool contributor Leigh Gant 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.

Yesterday, Droneshield Ltd (ASX: DRO) shares closed 5.54% higher at $3.81 a piece.

Tuesday’s uptick means the shares are now 14% higher over the year-to-date and 218% higher than this time last year.

As an Australian defence technology company specialising in counter-drone systems and electronic warfare solutions, Droneshield is one of very few ASX shares which have actually benefitted from rising geopolitical volatility and an ongoing war between the US and Iran. 

In a conflict situation, drones are used for everything from surveillance to direct strikes. This creates a huge demand for counter-drone systems like the ones Droneshield specialises in. This is why governments are hiking their spend on defence, with a focus on anti-drone defence systems. 

And the demand isn’t expected to dwindle the minute the US and Iran reach a peace agreement either. While conflict boosts demand, Droneshield has also announced several new military contracts and orders recently, showing that this is likely a long-term shift in how nations defend themselves.

If I bought $5,000 worth of Droneshield shares 5 years ago, what are they worth now?

It’s interesting to look back at how quickly Droneshield shares have climbed in value over the past six or 12 months. But, what about those investors which invested cash into the stock several years ago and have sat on it ever since?

Droneshield shares first listed on the ASX in June 2016 at 20 cents per share after raising $7 million through an IPO. The stock closed its first day of trading at 30 cents per share.

Fast forward to April 2021 and Droneshield shares had dropped to around 18 cents per share, shedding around 40% of its value. The shares didn’t start gaining traction until early 2024.

While a 218% annual share price increase is impressive, those gains are eclipsed by Droneshield’s 2,016.67% increase over the past five years!

That means that $5,000 invested into Droneshield shares 12 months ago is now worth $15,875. But $5,000 invested into Droneshield shares five years ago is now worth an enormous $105,833.50.

Can the shares keep climbing higher?

Yes, but not at the same rate they have climbed over the past five years.

TradingView data shows two out of three analysts have a strong buy rating on the defence stock. The third analyst has recently downgraded their rating to neutral. 

The average target price for DroneShield shares over the next 12 months is $4.50 a piece. At the time of writing, that implies an 18% upside ahead for investors. Some are more bullish and expect the shares to jump 31% to $5 in the next 12 months. 

The post $5,000 invested in Droneshield shares 5 years ago is now worth… appeared first on The Motley Fool Australia.

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• Here are the top 10 ASX 200 shares today
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• Where I’d invest $3,000 in ASX growth shares now
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• Looking for another DroneShield? Check out this buy-rated ASX defence stock

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

The idea of earning a second income from ASX shares is appealing.

But for many investors, it also feels risky. Chasing high returns or speculative stocks can lead to volatility and sleepless nights.

The good news is that building a second income does not have to involve taking big risks. In fact, a more measured approach can often be more effective over the long term.

Start with the right goal

The first step is to be clear about what you are trying to achieve.

If the goal is income, then the focus should be on building a portfolio that generates reliable cash flow, not just capital gains.

This means thinking in terms of yield. For example, a portfolio with a 5% average dividend yield would require around $400,000 to generate $20,000 per year.

Once you understand the target, the path becomes much clearer.

Focus on reliable businesses

Not all dividends are equal. Companies that consistently generate strong cash flow and have a history of paying dividends are often better suited for income-focused portfolios.

These tend to include sectors like banking, telecommunications, infrastructure, and consumer staples. They may not always deliver the fastest growth, but they often provide more predictable income. Think Telstra Group Ltd (ASX: TLS) and Woolworths Group Ltd (ASX: WOW).

The key is reliability. A slightly lower yield from a stable ASX share is often better than a high yield that may not be sustainable.

Use diversification to reduce risk

One of the simplest ways to lower risk is diversification.

By spreading investments across different sectors and companies, you reduce the impact of any single underperformer.

This can be done through a mix of individual ASX shares or by using ETFs that focus on income-producing assets like the Vanguard Australian Shares High Yield ETF (ASX: VHY).

Diversification helps create a more stable income stream over time.

Reinvest before you rely on it

In the early stages, it can be tempting to start using dividend income straight away.

But reinvesting those payments can significantly accelerate progress.

By reinvesting dividends, you increase the size of your portfolio, which in turn increases future income. This compounding effect can make a meaningful difference over time.

Once the portfolio reaches a comfortable size, you can then begin to draw on the income.

Be patient and stay consistent

Building a second income is not something that happens overnight.

It requires regular contributions, a long-term mindset, and the discipline to stay invested through market cycles.

There will be periods where dividends fluctuate or markets become volatile. But over time, a portfolio built on quality and consistency can deliver reliable income.

A steady path to financial freedom

You do not need to take big risks to build a meaningful second income from ASX shares.

By focusing on quality businesses, reinvesting early, and staying consistent, it is possible to create a portfolio that delivers steady cash flow over time.

It may not be the fastest approach, but it is one that many investors find far more sustainable.

The post How to build a second income from ASX shares without taking big risks appeared first on The Motley Fool Australia.

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

Sometimes ASX exchange traded funds (ETFs) can make investing far more efficient.

Instead of building a portfolio company by company, a single ETF can provide exposure to entire industries or global leaders. The key is choosing funds that tap into areas with strong long-term demand.

Here are three ETFs that approach that challenge from very different angles.

BetaShares Global Cybersecurity ETF (ASX: HACK)

The first ASX ETF to consider is the BetaShares Global Cybersecurity ETF.

Cybersecurity sits behind almost every part of the modern economy. As more systems move online, protecting data and infrastructure becomes essential.

This bodes well for the fund’s holdings, which are leading the way in protecting us all online. This includes names such as Palo Alto Networks (NASDAQ: PANW), CrowdStrike (NASDAQ: CRWD), and Fortinet (NASDAQ: FTNT).

Palo Alto Networks stands out as a key player in this space. The company has evolved from traditional firewall solutions into a broader platform that secures cloud environments, networks, and endpoints.

BetaShares Nasdaq 100 ETF (ASX: NDQ)

Another ASX ETF for investors to consider this week is the BetaShares Nasdaq 100 ETF.

This fund provides exposure to some of the largest and most influential companies in the world, many of which are driving technological change.

Its holdings include tech giants such as Apple (NASDAQ: AAPL), NVIDIA (NASDAQ: NVDA), and Amazon (NASDAQ: AMZN).

Apple remains one of the most important companies in the index. Beyond hardware, it has built an ecosystem of services and software that continues to generate recurring revenue. Its scale, brand strength, and integration across devices give it a unique position in the global technology landscape.

VanEck Video Gaming and Esports ETF (ASX: ESPO)

A third ASX ETF for investors to consider is the VanEck Video Gaming and Esports ETF.

Gaming has become one of the largest forms of entertainment globally, with growth driven by digital distribution, online play, and in-game monetisation.

This ETF provides investors with access to the leading players in the industry. This includes companies such as Tencent Holdings (SEHK: 700), Nintendo, and Take-Two Interactive (NASDAQ: TTWO).

Take-Two Interactive is a good example of how the industry is evolving. Known for major franchises like Grand Theft Auto, the company has increasingly focused on recurring revenue through online gameplay and content updates. This shift creates longer engagement cycles and more predictable earnings over time.

This fund was recently recommended by the team at VanEck.

The post Wondering which ASX ETFs to buy? Try these top picks appeared first on The Motley Fool Australia.

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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 Amazon, Apple, BetaShares Global Cybersecurity ETF, BetaShares Nasdaq 100 ETF, CrowdStrike, Fortinet, Nvidia, Take-Two Interactive Software, and Tencent and is short shares of Apple and BetaShares Nasdaq 100 ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Nintendo and Palo Alto Networks. The Motley Fool Australia has positions in and has recommended BetaShares Nasdaq 100 ETF. The Motley Fool Australia has recommended Amazon, Apple, CrowdStrike, and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.