Passive income is one of the most rewarding things about investing. Getting money paid into my bank account year after year sounds great to me.
There are a wide range of investments available on the ASX such as ASX blue-chip shares. But, the biggest businesses aren't necessarily the best names to buy with how large they already are and the limited earnings growth prospects.
Banking is becoming increasingly competitive, while resource prices are unpredictable at the best of times. In my view, the two passive income ideas below are better options than names like Commonwealth Bank of Australia (ASX: CBA), and could be used to generate $200 per month (or more)
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APA Group (ASX: APA)
If I'm investing for passive income, I'd want to choose names I'm confident will continue paying dividends, even in difficult times.
APA is one of the largest energy businesses in Australia. With its key asset being national gas pipelines that span the country for tens of thousands of kilometres. It transports approximately half of the nation's gas usage, so APA is an essential business for Australia.
It also owns a number of other important assets including gas processing, gas storage, gas power stations, electricity transmission, solar farms and wind sales.
The business regularly expands its asset portfolio.
For example, last week it announced that the Australian Energy Regulator (AER) had approved APA's $213 million expansion of the South West Pipeline in Victoria to help meet projected peak day gas shortfalls from 2029, which will allow for more Victorian gas from the Otway Basin and Lochard's Iona underground gas storage facility.
The business has a $3 billion organic growth pipeline, which gives it significant optionality to increase earnings and cash flow in the coming years. Plus, most of its revenue is climbing because it's linked to inflation.
Why is it such a good passive income idea? It has increased its distribution every year for the past 20 years, which is an incredibly consistent and reliable record.
I expect the business could pay a distribution of at least 59 cents per security in 2027, which translates into a distribution yield of 5.75%.
WCM Quality Global Growth Fund (ASX: WCMQ)
The other ASX share I want to highlight is this exchange-traded fund (ETF) which focuses on investing in a portfolio of between 20 to 40 high-quality global stocks.
The fund's goal is to outperform the global share market, which (as of June 2026) it has done over the past three months, three years, five years and since the ETF's start in August 2018.
It looks for stocks with improving economic moats and corporate cultures that strengthen their competitive advantages. In my view, it's a very effective investment strategy, and it's likely to continue delivering strong returns over time, with very little reliance on the 'Magnificent Seven' for those returns.
In terms of the passive income, it targets a minimum annualised cash yield of at least 5% per annum. Net returns that are stronger than 5% can help up push up the value of the fund and support larger payouts in the future.
$200 of monthly passive income
The average dividend yield of these two stocks is 5.4%. Therefore, to generate $2,400 of annual passive income ($200 per month), it would take $44,444 spread across these two ideas.
But, these aren't the only ASX shares I'd choose for passive income because I'd want to have a diversified portfolio.
