High-yielding S&P/ASX 200 Index (ASX: XJO) shares are even more attractive for passive income after rate cuts by the Reserve Bank of Australia (RBA).
The return offered by cash savings has materially reduced this year. The share prices of many businesses have risen too. The trouble is, higher share prices push down dividend yields for prospective investors.
There aren't many high-yielding ASX 200 shares that I'd personally buy with yields above 5%. For example, coal miners have high yields, but they aren't the type of businesses I'd buy for my portfolio. Instead, the high-yielding stocks below could work well alongside names like Telstra Group Ltd (ASX: TLS) and APA Group (ASX: APA) in a portfolio.
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Charter Hall Long WALE REIT (ASX: CLW)
The first business I want to tell you about is a real estate investment trust (REIT) that owns a diversified portfolio across a range of areas, including hotels/pubs, service stations, telecommunication exchanges, and data centres.
There are a couple of key reasons why the business is able to pay a large, appealing yield. Firstly, the business pays all of its rental profit to investors each year, which I think makes it very appealing for passive income. I don't think that's a bad thing because its rent can grow from contracted increases with tenants – it doesn't need to retain rental profits to deliver growth.
It expects to pay a distribution of 25.5 cents per unit in FY26, which translates into a forward distribution yield of 5.6%.
The second reason its yield is still high is because it's currently trading at a slight discount to its net tangible assets (NTA) per security of $4.59 at 30 June 2025 – that's the underlying value of the business. I think the NTA will increase if there are any more RBA rate cuts, boosting property values.
Magellan Financial Group Ltd (ASX: MFG)
The other high-yielding ASX 200 share I want to highlight is the fund manager Magellan.
Over the last few years, the dividend yield from Magellan appeared to be a yield trap, as the company's funds under management (FUM) decreased. In other words, Magellan's dividend payout has been reducing since 2021, so the dividend yield wasn't as attractive as it seemed because the next payout was very likely to be smaller.
However, the fund manager now appears to have reached a period of stabilisation. In FY25, Magellan's average funds under management (FUM) rose 4% to $38.4 billion, and operating earnings per share (EPS) grew 7% to 89.8 cents.
The company's 2025 financial year was assisted by a larger earnings contribution from strategic partnerships and investments – income from associates rose 202% to $31.1 million. Its holdings in investment bank Barrenjoey and fund manager Vinva are starting to pay off.
If the FUM net outflows have largely stopped for the core Magellan business, and other areas of the company (its investments) are growing, I think there's a prospect of rising dividends in the longer term.
The forecast on Commsec suggests a Magellan annual dividend of 71.9 cents per share in FY26 and 72.5 cents per share in FY27. Excluding any franking credits, those yields translate into forward dividend yields of 7.3% and 7.4%. I'm expecting the grossed-up dividend yields, including franking credits, to be close to 9% (and higher if the payouts are fully franked).
This could make Magellan one of the highest-yielding ASX 200 shares over the next couple of years.
