There is a group of ASX dividend shares that I believe will make great long-term investments for both capital growth and passive income over the long-term.
I'm so optimistic about certain names that I've invested in them for my own portfolio, and I'm planning to buy more in the coming months and years.
In my view, the names below are two of the most compelling passive income stocks right now.
Image source: Getty Images
L1 Global Long Short Fund Ltd (ASX: GLS)
This business is a listed investment company (LIC) and it's a recent addition to my portfolio. It's similar to the L1 Long Short Fund Ltd (ASX: LSF), except it only invests in global shares, rather than a mixture of ASX shares and global shares.
The globally-focused business focuses on company-specific opportunities where valuation and earnings delivery can drive returns across a "range of potential macro environments".
In its monthly update for July 2026, it noted that its median 'long' position is trading on a price/earnings (P/E) ratio of 10, supported by double-digit earnings per share (EPS) growth and modest debt levels.
As its name suggests, the LIC can also short businesses, which essentially means it can bet on certain names in the portfolio going down in value. Therefore, it can make investment returns whether the market goes up or down.
The ASX dividend share can give Australian investors exposure to a diversified portfolio, with investments (and short positions) across North America, Europe and the Asia Pacific regions.
L1 Group Ltd (ASX: L1G) only started managing this LIC in November 2025, but its portfolio's net return has been 17.9% since then, outperforming the global share market by 6.6% in that time.
The global LIC has provided dividend guidance of at least 8 cents per share in FY27, with quarterly dividends of 2 cents per share. It has also stated an intention to pay sustainable and growing dividends over time.
Its guidance implies a guided grossed-up dividend yield of at least 5.4%, including franking credits, at the time of writing.
Rural Funds Group (ASX: RFF)
Rural Funds is the other ASX dividend share I want to talk about. It's a real estate investment trust (REIT) that provides exposure to a portfolio of agricultural properties.
The business offers a diversified portfolio across cattle, almonds, macadamias, vineyards and cropping.
The FY26 result highlighted the strength of the REIT's ability to deliver good passive income despite challenging conditions in relation to higher interest rates.
Rural Funds reported that FY26 net property increase grew 5.7% thanks to additional rental income on capital expenditure (primarily macadamia orchards) and indexation. Its rental contracts have income growth from fixed annual increases and inflation-linked increases.
It also reported that adjusted funds from operations (AFFO) – the net rental profit – rose by 1.7%, despite interest costs increasing significantly.
The business has announced a few asset sales, at a premium to the stated book value, which will decrease interest costs and put the balance sheet in a healthier position. It had adjusted net asset value (NAV) of $3.22 as of June 2026 (which was a 4.5% rise year over year) – that means, it's trading at a 40% discount to the stated value.
It expects to pay a distribution per unit of 11.73 cents in FY27, which is a distribution yield of 6%.
