Top ASX shares to buy in June and hold for retirement

Looking forward to your retirement?

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Everyone wants a comfortable retirement — one in which you can relax with family and friends, enjoy time for hobbies and travel, and allow the money you've worked so hard for to keep working for you.

But sadly, this aspirational lifestyle doesn't just magically materialise when you hit retirement age. It needs to be planned and nurtured throughout your working life.

One way to help secure your financial freedom and enable you to retire sooner is by investing in ASX shares. By creating a diverse portfolio of quality Australian companies, you can start building a passive income stream and allow the magic of compounding to boost your wealth over time.

On that note, we asked our Foolish writers which ASX shares they would recommend buying in June and holding through to retirement.

Here is what they came up with:

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

  • Betashares Global Cybersecurity ETF (ASX: HACK), $889.88 million
  • Lifestyle Communities Ltd (ASX: LIC) $1.51 billion
  • Brickworks Limited (ASX: BKW), $4.08 billion
  • iShares S&P 500 ETF (ASX: IVV), $7.88 billion
  • Washington H Soul Pattinson & Company Ltd (ASX: SOL), $11.55 billion
  • Macquarie Group Ltd (ASX: MQG), $75.16 billion

(Market capitalisations as of market close 7 June 2024).

Why our Foolish writers say these ASX stocks are great long-term buys

Betashares Global Cybersecurity ETF

What it does: HACK is an exchange-traded fund (ETF) that currently holds 30 leading global companies focused on cybersecurity. At the time of writing, the ETF's top four holdings are Broadcom, Cisco Systems, Crowdstrike, and Palo Alto Networks.

By Bernd Struben: When it comes to ASX shares to buy and hold for retirement, I like the instant diversity that comes with buying the HACK ETF. Furthermore, management periodically amends the ETF's holdings and specific weightings.

With an eye on the long term, the demand for the services provided by the companies HACK holds in safeguarding personal, business and government data from malicious players is only likely to increase. Last week's data breach announced by Ticketek was just the latest reminder of the ongoing cyber threats.

I also think many of these companies are likely to benefit from the rapid advancement in artificial intelligence (AI), which in turn should boost the returns HACK shareholders will receive.

As for those returns, as at 30 April, the HACK ETF had returned 38.6% over 12 months. The five-year returns average 15.2% annually. Management fees run at 0.67% a year.

Motley Fool contributor Bernd Struben does not own units of the Betashares Global Cybersecurity ETF.

Lifestyle Communities Ltd

What it does: Lifestyle Communities develops, owns and manages affordable, independent-living, residential land-lease communities. At present, it has 32 residential land-lease communities under contract, in planning, in development, or under management.

By James Mickleboro: I think Lifestyle Communities could be a great buy-and-hold option for a retirement portfolio this month. Particularly after a sell-off in April means that its shares are down by almost a third year to date.

This sell-off has been driven by short-term headwinds, which are weighing on its performance. However, nothing has changed with respect to its long-term outlook. Goldman Sachs highlights that this remains very positive thanks to "structural growth in demand for land lease as the sector increases its penetration among retirees."

In addition, the broker notes that "industry build rates [are] below demand from an ageing population." It feels this bodes well for Lifestyle Communities and expects settlements "to increase considerably into FY25/26E, driving earnings growth and unlocking cash flow."

Goldman Sachs currently has a buy rating and an $18.45 price target on Lifestyle Communities shares.

Motley Fool contributor James Mickleboro does not own shares of Lifestyle Communities Ltd.

Brickworks Limited

What it does: Brickworks is a leading manufacturer of building products, including bricks, pavers, and masonry blocks, in Australia and North America. The company is also engaged in property and investment activities.

By Kate Lee: As of December 2023, Brickworks had shareholders' equity of $3.5 billion. Compared to its current market capitalisation of just over $4 billion, this translates to a price-to-book (P/B) ratio of 1.15 times. This is at the low end of its historical trading range of 1x to 1.6x over the last 10 years.  

While Brickworks is a well-established building materials manufacturer, this business segment represents just about $608 million, or 17% of its shareholders' equity. The remainder is primarily composed of two parts: investments in listed shares, most notably in Washington H Soul Pattinson & Company Ltd (ASX: SOL), valued at approximately $3 billion, and its property development ventures in collaboration with Goodman Group (ASX: GMG).

I think these property ventures offer significant growth potential. As I recently covered, Brickworks holds prime industrial land holdings in strategic locations such as Western Sydney. Demand for industrial properties — think those logistics centres for retailers, usually located near metropolitan cities — has been soaring globally as consumer demand for online shopping continues to increase.

The ongoing strength of rental prices, increases in land values due to limited supply, and continued land development are likely to support Brickworks' property valuation, in my view.

In addition, Brickworks is known for its consistent dividend payments, which are attractive to income-focused investors. It offers a fully-franked dividend yield of 2.47% at Friday's closing share price of $26.72.

I think now is a perfect opportunity to buy this great dividend payer and enjoy the dividend growth in the years to come until your retirement.    

Motley Fool contributor Kate Lee owns shares of Brickworks Limited. 

iShares S&P 500 ETF

What it does: The iShares S&P 500 is an exchange-traded fund (ETF) that tracks the most popular index in the world — the S&P 500 Index (SP: .INX). This index represents the largest 500 companies listed on the US markets. 

By Sebastian Bowen: When thinking about investments one can simply buy today and conceivably hold for decades without much thought, this index fund comes to mind. Endorsed by the legendary Warren Buffett himself, an S&P 500 index fund offers the best of American capitalism. 

For one, it holds 500 of the largest companies in America, and the world for that matter, offering instant industrial, geographical, and economic diversification. 

But the US markets arguably also house the highest calibre businesses on the planet. Apple, Netflix, Alphabet, PayPal, American Express, Coca-Cola, Amazon, McDonald's… all of these top-tier companies can be found as an investment within the iShares S&P 500 ETF. 

I think the United States will be the backbone of the global economy for decades to come and continue to house the highest-quality businesses in the world to boot. For these reasons, I would happily add this index fund to any retirement portfolio today. 

Motley Fool contributor Sebastian Bowen owns shares of Apple, Netflix, Alphabet, PayPal, American Express, Coca-Cola, Amazon, and McDonald's.

Washington H Soul Pattinson & Company Ltd

What it does: Soul Patts is an investment business that has been listed on the ASX since 1903. It started as a pharmacy chain and now has a diversified portfolio of assets. Chair Robert Millner is the fourth-generation leader from the same family to chair the company. 

By Tristan Harrison: I believe an effective ASX share for retirement is one that can provide stability, long-term growth and solid dividends.

Soul Patts has created a portfolio of defensive investments that generate resilient cash flow. Some of its biggest allocations are in the sectors of resources, telecommunications, property, agriculture, financial services, electrification, bonds/credit, and swimming schools.

The ongoing growth of its existing assets, plus occasional new investments, is helping Soul Patts increase its own cash flow. This growing cash flow is funding a growing river of dividends from the business. Pleasingly for people in retirement, this ASX share has grown its dividend every single year since 2000, though future increases are not guaranteed.

The company has paid a dividend every year since it was listed in 1903. That means it has delivered passive income through two world wars, two global pandemics, economic crashes (including the GFC and the Great Depression), various prime ministers, and so on.

With a grossed-up dividend yield of around 4%, I think Soul Patts is a solid choice for income and potential capital growth over time. 

Motley Fool contributor Tristan Harrison owns shares of Washington H Soul Pattinson & Company Ltd. 

Macquarie Group Ltd

What it does: Macquarie is a diversified banking giant that differentiates itself through a suite of non-banking services, including investment, asset management, commodities, and infrastructure. I believe Macquarie's point of difference offers it a competitive advantage that will compound over time.

By Zach Bristow: Rising market tensions, the inflation/rates axis, and a new commodities supercycle have set the new investment landscape. In my opinion, Macquarie is well-positioned to be a long-term beneficiary of these macroeconomic crosscurrents.

Firstly, as mentioned, Macquarie's offering is differentiated from other Aussie banks, given its exposure to capital markets, infrastructure, and commodities trading. This broad exposure to critical industries gives the bank more recession-proof earnings.

We saw this in FY 2022/23 when many banks were operating tight net interest margins (NIMs), and Macquarie threw off $13.50 in earnings per share (EPS) on dividends of $7.50 apiece. I believe a strong competitive advantage like this is a necessity to comfortably hold an investment into retirement. 

Secondly, while Macquarie's operating profits were down this year – due to an exceptionally strong 2023 – the bank's 13% return on equity (ROE) in H2 FY 2024 surpassed the industry's five-year average of 11%. This fuelled dividends of $6.40 per share for the full year. 

At the current price-to-earnings (P/E) ratio of 21 times, this dividend offers the investor a 3% trailing yield on a 4% earnings yield, comparable to most high-interest vehicles – but also with the prospects of substantial long-term capital gains.

In my opinion, the price/value equation is skewed in our favour when thinking about holding Macquarie shares into retirement.

Motley Fool contributor Zach Bristow does not own shares of Macquarie Group Ltd.

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. American Express is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Amazon, Apple, BetaShares Global Cybersecurity ETF, Brickworks, Cisco Systems, CrowdStrike, Goldman Sachs Group, Goodman Group, Macquarie Group, Netflix, Palo Alto Networks, PayPal, Washington H. Soul Pattinson and Company Limited, and iShares S&P 500 ETF. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended Broadcom and has recommended the following options: short June 2024 $67.50 calls on PayPal. The Motley Fool Australia has positions in and has recommended BetaShares Global Cybersecurity ETF, Brickworks, Macquarie Group, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Alphabet, Amazon, Apple, CrowdStrike, Goodman Group, Netflix, PayPal, 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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