There is a wide range of ASX dividend shares available to investors to buy. There are many with large dividend yields that could produce market-beating returns.
With how the central bank interest rate in Australia has increased, I think it's fair to say that Aussie investors may want a higher dividend yield than last year. Savings accounts are now offering a noticeably better interest rate.
So, with that in mind, I'm going to outline two ASX dividend shares with very high dividend yields and the potential to deliver capital growth.
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WAM Microcap Ltd (ASX: WMI)
One of the biggest advantages of a listed investment company (LIC) structure is that a company's board of directors can set the size of dividends it wants, so LICs can smooth out dividend payments, even during volatility.
WAM Microcap has grown or maintained its annual dividend per share each year since it first paid one in FY18. FY24 has been the only year that it has maintained the payout.
The company is expecting to increase its payout by 1% in FY26 to 10.7 cents per share. That translates into a grossed-up dividend yield of 10.25%, including franking credits. That's obviously an excellent level of passive income.
WAM Microcap has a profit reserve of 55.4 cents per share, meaning it has the accounting profits to pay the dividend for around five years at the current level.
How does this ASX dividend share make profit? It aims to invest and make returns with the most exciting undervalued growth opportunities in the ASX small-cap share space.
At the end of February 2026, the LIC had generated a portfolio performance of an average of 15.4% per year since inception in June 2017, before fees, expenses and taxes. That was more than 7% per year better than its small-cap benchmark. Small caps can deliver good returns because they are often under-researched and earlier on in their growth journey.
Some of its largest investments at the end of February 2026 were Tuas Ltd (ASX: TUA), Gentrack Group Ltd (ASX: GTK), Beacon Lighting Group Ltd (ASX: BLX), and Autosports Group Ltd (ASX: ASG).
After falling close to 10% during March, this could be a good time to consider investing in the business.
Charter Hall Long Wale REIT (ASX: CLW)
The other high-yielding ASX dividend share I want to highlight is this real estate investment trust (REIT) with a very diversified portfolio across multiple sectors.
Diversification is one of the biggest benefits of this ASX dividend share – plenty of other REITs are focused on just one sector, like shopping centres, office buildings, or industrial property.
This REIT is invested across numerous areas, including pubs and hotels, service stations, data centres, telecommunications exchanges, distribution centres, waste and recycling facilities, Bunnings properties, and so on.
One of the main advantages of this REIT is that its rental contracts are very long term, providing income stability and security for investors who want operating earnings to be less bumpy than, say, a miner.
Pleasingly, the business has rental indexation built into its portfolio, with properties either on fixed annual increases or the increases are linked to inflation.
It's expecting to grow its FY26 distribution by 2% to 25.5 cents per security in FY26, which translates into a distribution yield of 7.4%, which I think is an appealing starting point with further rental growth expected.
