Top ASX shares to buy for your superannuation fund in May 2024

Is your super working hard for you?

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Deciding which ASX shares to buy for your superannuation fund is not easy. After all, you have toiled all your working life to earn this money, and hopefully, it will afford you a happy, financially secure, and stress-free retirement.

Likewise, your super investment is not something you should constantly meddle with. This means you'll want the ASX shares within it to be high-quality companies you can hold for the long term — not risky stocks you need to dip in and out of regularly.

Whether you run your own self-managed super fund (SMSF) or simply like to add a few personal touches to your retail super fund, read on!

Because we asked our Foolish contributors which ASX shares they reckon deserve a place in your superannuation fund in May.

Here is what the team came up with:

6 best ASX shares for your super fund right now (smallest to largest)

  • VanEck Morningstar Wide Moat ETF (ASX: MOAT), $891.95 million
  • Collins Foods Ltd (ASX: CKF) $1.10 billion
  • iShares S&P 500 ETF (ASX: IVV), $7.74 billion
  • Medibank Private Ltd (ASX: MPL), $10.05 billion
  • Coles Group Ltd (ASX: COL), $21.75 billion
  • Westpac Banking Corp (ASX: WBC), $92.60 billion

(Market capitalisations as of market close 10 May 2024).

Why our Foolish writers rate these ASX stocks as super!

VanEck Morningstar Wide Moat ETF

What it does: This ASX exchange-traded fund (ETF) gives investors exposure to a diversified portfolio of attractively priced US companies with sustainable competitive advantages.

By James Mickleboro: There are few better investors to follow in the footsteps of than Warren Buffett. Since the 1960s, the Oracle of Omaha has consistently beaten the market and delivered outsized returns for his Berkshire Hathaway business.

The remarkable thing is that Buffett hasn't achieved his success by using complex investment strategies. His approach is about as simplistic as it gets on the stock market, and time and time again, he has beaten the market.

Buffett does this by buying high-quality companies with sustainable competitive advantage at fair prices. The VanEck Morningstar Wide Moat ETF replicates this strategy, making it super easy for investors to invest in companies that Buffett would buy without having to do any research.

Over the past decade, the index this ETF tracks has generated an average total return of 16% per annum, significantly better than the long-term market average of 10% per annum.

Motley Fool contributor James Mickleboro does not own units of the VanEck Morningstar Wide Moat ETF.

Collins Foods Ltd

What it does: Collins Foods is a major franchisee of KFC outlets in Australia and owns a growing network of KFCs in Germany and the Netherlands. The company is also responsible for the Taco Bell chain in Australia.

By Tristan Harrison:  I've long admired the simple growth potential of this ASX 200 company and recently bought shares. I decided to take advantage of the more than 20% decline in the Collins Foods share price since January.

What's simple about the growth? The company just needs to keep opening/acquiring new locations to grow its scale.

The HY24 result showed everything I think Collins is capable of continuing into the future. Revenue rose 14.3%, underlying earnings before interest, tax, depreciation and amortisation (EBITDA) increased 16.7%, and underlying net profit went up 28.7%. Seeing the profit levels rise (noticeably) faster than revenue is a good sign for future profit scaling of the business.

KFC Australia saw a same-store sales (SSS) growth of 6.6% in HY24, while KFC Europe's SSS growth was 8.8%. That's a solid organic growth rate without taking into account any new stores.

Collins Foods opened four new KFC locations in Australia in HY24 and eight in the Netherlands. I think Europe's large population gives the company a long growth runway.

In terms of the dividend, the annual payout has increased every year over the past decade. The current grossed-up dividend yield is around 4.25%.

Motley Fool contributor Tristan Harrison owns shares of Collins Foods Ltd. 

iShares S&P 500 ETF

What it does: The IVV ETF is a low-cost, index-based ASX ETF that tracks the performance of the 500 largest companies comprising the S&P 500 Index (SP: .INX).

By Bronwyn Allen: I like the kind of stocks you can buy and hold forever for my superannuation fund. My super is a long-term savings vehicle for my retirement, so I want it full of boring yet reliable long-term growth stocks.

And it helps that the world's most successful investor, Warren Buffett, has long recommended that no-fuss investors like me avoid individual stock picking and just consistently throw money into low-cost S&P 500 index funds instead.

He says: "Just keep buying. American business is going to do fine over time, so you know the investment universe is going to do very well." Buying the IVV ETF means owning a slice of mega global companies like Microsoft, Apple, Nvidia, Amazon, Alphabet, and Meta Platforms.

The IVV ETF is also one of the 10 cheapest ETFs on the ASX with a management expense ratio (MER) of 0.04%, so it fits Buffett's brief very well.

The iShares S&P 500 ETF share price is currently $52.61, up 29% over the past 12 months and it's 91% higher over five years.

Motley Fool contributor Bronwyn Allen does not own units on the iShares S&P 500 ETF. 

Medibank Private Ltd

What it does: Medibank Private is Australia's largest private health insurance provider in the country. More than 4 million people entrust their health coverage to Medibank or its more affordable Ahm label.

By Mitchell Lawler: Health insurance is an industry where size matters. The more members an insurer has, the greater its bargaining power to secure better arrangements with hospitals and other health-based organisations.

It's a flywheel effect: More members lead to better prices, which in turn generates more members. Once that flywheel is spinning, competitors can struggle to keep pace.

Importantly, Medibank Private is a business that I see being as relevant in 30 years as it is today. That's critical when it comes to holding compounding investments inside a superannuation fund.

The last thing anyone wants is a chunk of their retirement being vaporised in a business that goes bust. In my opinion, the odds of that happening to Medibank are minuscule.

Motley Fool contributor Mitchell Lawler does not own shares of Medibank Private Ltd.

Coles Group Ltd

What it does: Coles is the second-largest supermarket operator in Australia, with a huge network of stores around the country. Coles also owns the bottle shop chains Liquorland, Vintage Cellars, and First Choice.

By Sebastian Bowen: The qualities investors typically look for in shares to include in a superannuation fund are stability, certainty, and a reliable dividend. Coles arguably offers all three in spades.

Coles is a consumer staples stock, meaning it sells goods we all need, rather than necessarily want.

It's hard to imagine a future where a decent chunk of the Australian population doesn't visit Coles to buy food and drinks or stock up on household essentials. As long as there is a local Coles offering these goods at a relatively low cost, Australians will visit it on a regular basis.

This makes Coles' earnings base highly defensive, which should help anyone with this company in a super fund sleep well at night.

Coles has also built up a very strong dividend track record since it was listed on the ASX back in late 2018. The company has yet to deliver a dividend cut and has increased its annual dividends every year since its ASX debut.

At recent pricing, investors can grab Coles shares with a fully franked dividend yield of more than 4%.

Motley Fool contributor Sebastian Bowen does not own shares of Coles Group Ltd.

Westpac Banking Corp

What it does: Established in 1817 as the Bank of New South Wales, Westpac provides a range of consumer, business, and institutional banking and wealth management services. It has operations throughout Australia, New Zealand, and the near Pacific region.

By Bernd Struben: I think Westpac shares deserve a place in most every superannuation portfolio.

The big four bank recently completed all 354 activities of its risk transformation plan, improving its risk governance. Westpac today is a simpler and stronger business than it was in recent years.

And I was pleasantly surprised by Westpac's first-half results.

Despite an inflation-exacerbated 8% increase in half-year operating expenses to $5.40 billion, Westpac's $3.51 billion net profit, excluding notable items, was down only 1% year-on-year. And with Australia's economic growth forecast to rebound to 2.5% in 2025, the bank looks well placed to increase those profits.

Atop announcing a share-price-boosting additional $1 billion worth of on-market share buybacks, management also declared an interim dividend of 90 cents per share. Westpac shares now trade on a fully franked trailing yield of 5.5%.

The Westpac share price is up 26% in 12 months.

Motley Fool contributor Bernd Struben does not own shares of Westpac Banking Corp.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Amazon, Apple, Berkshire Hathaway, Meta Platforms, Microsoft, Nvidia, and iShares S&P 500 ETF. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has positions in and has recommended Coles Group. The Motley Fool Australia has recommended Alphabet, Amazon, Apple, Berkshire Hathaway, Collins Foods, Meta Platforms, Microsoft, Nvidia, VanEck Morningstar Wide Moat ETF, 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.

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