Superannuation is a great place to invest for passive income because of the lower tax rate and the fact that it doesn't rely on negative gearing or capital gains discounts to be an effective strategy.
I'm going to look at two ASX-listed shares that could be very effective dividend investments.
With high yields, diversification and the potential for long-term growth, I think they're excellent choices with $20,000 for the following reasons.
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MFF Capital Investments Ltd (ASX: MFF)
MFF is best-known as a listed investment company (LIC) that invests in a high-quality portfolio of shares that have compelling competitive advantages and above-average earnings growth potential. It owns plenty of the world's leading companies in its portfolio, though it can adjust if it needs to.
It doesn't take massive earnings growth for a business to deliver great returns – simply compounding earnings per share (EPS) at a good pace can lead to good results (as well as dividends for investors).
MFF's strong portfolio returns have enabled the business to deliver average total shareholder returns (TSR) in the double digits.
The business has rapidly hiked its annual dividend per share over the past several years. In FY26 alone it expects to hike its annual payout by 23.5% year-over-year to 21 cents per share, which translates into a forward grossed-up dividend yield of more than 6%, including franking credits. I think that's a great starting point for a passive income investment in superannuation.
I predict the FY27 annual dividend per share could be 25 cents, if it continues its trend of increasing the payout by 1 cent per share every six months. That would translate into a grossed-up dividend yield of 7.3%, including franking credits, at the time of writing.
Charter Hall Long WALE REIT (ASX: CLW)
Another ASX share I really want to tell you about is this diversified real estate investment trust (REIT).
It's invested in various types of properties including government buildings (such as Geoscience Australia), pubs, supermarkets and distribution centres, data centres, telecommunication exchanges, service stations, food manufacturing, waste and recycling management, Bunnings properties and plenty more.
We don't necessarily need to invest in various properties or REITs ourselves to get diversification – this one ASX share can give superannuation investors great property-generated passive income and diversification.
A key part of the strategy is to own properties that have long leases with tenants. With an occupancy rate of 99.9% and a weighted average lease expiry (WALE) is around nine years, so it has very pleasing rental characteristics.
It's delivering decent rental growth too. The FY26 half-year result included 3% like-for-like growth in property income through a mixture of inflation-linked rental income and fixed annual increases.
For FY26, it expects to hike its annual distribution per unit by 2% to 25.5 cents. That translates into a forward distribution yield of 7.3%. In my view, that's a very strong starting yield.
It's not the only two ASX shares I'd buy though, there are a few other appealing picks.
