One of the most appealing things about superannuation is that it has a lower tax rate than the company tax rate and the individual tax rate of a full-time worker. Superannuation may have a lower tax rate than trusts as well.

Another positive of investing through superannuation is its structure, which supports long-term investing. For people in the accumulation phase, they could make investments for decades before they can access that money.

The money available to use for passive income is the after-tax amount. This is why superannuation is so advantageous: less of the income is lost to tax compared to most tax brackets for individuals. I'd prefer not to lose a third of my passive income return to tax each year.

Not only is the tax rate lower in the accumulation phase of superannuation, but the tax rate could be as low as 0% in retirement, depending on the superannuation balance.

Of course, the taxation conditions for each household are different, so we'll just consider income goals from here.

How much is needed in superannuation for $12,000 of monthly passive income?

Receiving $12,000 in dividends each month amounts to an annual goal of $144,000. I'd love to receive that level of dividend income.

The question of how much money would need to be invested to generate that much income comes down to the investment's yield. But investors should consider more than just the yield – reliability and growth are also important aspects.

Plenty of ASX shares also attach franking credits to their dividends, boosting the after-tax dividend yield on offer.

Different portfolios can have different dividend yields. A portfolio with a 3.5% dividend yield would need to be double the size of a portfolio with a dividend yield of 7% to generate the same level of passive income.

For example, if a portfolio were $2.06 million in size, it would generate approximately $144,000 of annual passive income with a 7% dividend yield. If the portfolio had a 3.5% dividend yield, it would need to be $4.11 million in size to achieve the same level of annual payments.

Each dividend yield would require a different portfolio size to generate $144,000 annually. For example, a 5% dividend yield would require a $2.88 million portfolio and a 6% dividend yield would require a $2.4 million portfolio.

The types of ASX dividend shares I'd choose to buy

As I said before, if I'm investing for passive income in superannuation, I'd also want to take reliability and growth into account. I believe all of the businesses I'm about to name have better-than-average payout reliability.

If investors want to generate higher dividend yields, I'd look at reliable real estate investment trusts (REITs) and quality companies with franking credits, particularly listed investment companies (LICs).

Some of the businesses with a higher dividend yield I'd look at include MFF Capital Investments Ltd (ASX: MFF), WCM Global Growth Ltd (ASX: WQG), WAM Microcap Ltd (ASX: WMI), Dexus Industria REIT (ASX: DXS), WAM Leaders Ltd (ASX: WLE), Charter Hall Long WALE REIT (ASX: CLW), WAM Microcap Ltd (ASX: WMI) and Universal Store Holdings Ltd (ASX: UNI).

Some of the businesses with a lower dividend yield, but deliver strong growth and/or reliability, include Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), Rural Funds Group (ASX: RFF), Centuria Industrial REIT (ASX: CIP), L1 Long Short Fund Ltd (ASX: LSF) and Telstra Group Ltd (ASX: TLS).

These aren't the only ASX shares I'd want to add into my passive income portfolio, though.

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One of the best things about superannuation is the fact that it has a lower tax rate than the individual tax rate and company tax rate. It may have a lower tax rate than trusts too.

Another advantage of superannuation investing is its structure, which promotes long-term investing. For people in the accumulation phase, they may make investments for decades before they can access that money.

When it comes to investing in passive income, the money we can use is the after tax amount. That's why it's more fruitful to invest for passive income in superannuation because less of the income is being lost to tax than most of the tax brackets for individuals. I'd prefer not to lose a third of my passive income to tax each year.

Pleasingly, not only is the tax rate lower in the superannuation accumulation phase, it could be as low as 0% in retirement, depending on the superannuation balance.

The taxation circumstances of each household is different, so we'll just look at the income goals from now on.

How much is needed in superannuation for $7,000 of monthly passive income?

Receiving $7,000 in dividends each month equates to an annual goal of $84,000 per year. I'd love to receive that level of dividend income.

The question of how much it would take to generate that much income comes down to the yield of the investment. Of course, there's more to investing than just the yield. Reliability and growth are also important factors.

Many ASX shares offer the great bonus of franking credits, boosting the dividend yield on offer.

I'll point out that a portfolio with an average dividend yield of 3% would need to be double the size of a portfolio with a dividend yield of 6% to generate the same level of passive income.

For example, if a portfolio were $1.4 million in size, it would generate $84,000 of annual passive income with a 6% dividend yield. If the portfolio had a 3% dividend yield, it would need to be $2.8 million in size to achieve the same level of annual payments.

Every dividend yield would require a different portfolio size to achieve $84,000 annually. For example, a 4% dividend yield would require a $2.1 million portfolio and a 5% dividend yield would require a $1.68 million portfolio.

The types of ASX dividend shares I'd choose to buy

As stated earlier, if I'm investing for passive income in superannuation, I'd also want to consider reliability and growth. I rate all the investments I'm about to highlight as above-average for payout reliability.

If investors want to unlock mid-to-higher dividend yields, I'd look at quality companies with franking credits, good value and reliable real estate investment trusts (REITs), and listed investment companies (LICs).

Some of the businesses with a dividend yield of between 5% to 7% that I'd look at include Telstra Group Ltd (ASX: TLS), WCM Global Growth Ltd (ASX: WQG), Centuria Industrial REIT (ASX: CIP), Dexus Industria REIT (ASX: DXI), Rural Funds Group (ASX: RFF), Charter Hall Long WALE REIT (ASX: CLW), MFF Capital Investments Ltd (ASX: MFF) and L1 Long Short Fund Ltd (ASX: LSF).

Then there's ASX dividend shares with a larger dividend yield. Some of my favourites with bigger yields include WAM Microcap Ltd (ASX: WMI), Future Generation Global Ltd (ASX: FGG), Future Generation Australia Ltd (ASX: FGX), WAM Leaders Ltd (ASX: WLE), Universal Store Holdings Ltd (ASX: UNI) and Hearts and Minds Investments Ltd (ASX: HM1).

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There are some great ASX shares out there that pay high dividend yields, but I'd only want to buy stocks I'm confident can provide reliable (and even growing) payouts.

Of course, dividends aren't guaranteed. But, I'm optimistic about the future payments from these businesses and I believe the payouts will be even larger in the years ahead.

Shaver Shop Group Ltd (ASX: SSG)

Shaver Shop is a small and compelling ASX share, in my view. It's one of the leading retailers of male and female personal grooming products.

It had 126 Shaver Shop stores at the last count and sells items like electric shavers, clippers, trimmers and wet shave items. It also sells additional product ranges like oral care, hair care, massage, air treatment and beauty categories.

You may not expect a business like this to have a resilient dividend record going back several years, but it does. Its dividend increased each year between FY17 and FY23, it maintained it in FY24 and hiked the payout again slightly in FY25. I think its earnings are more defensive than some other retail sectors.

Impressively, the last two dividends declared by the business amount to a grossed-up dividend yield of 10.5%, including franking credits, at the time of writing.

If the business continues to offer exclusive products from brands, expands its own brand (called Transform-U), and opens more stores, I think the ASX share has a very promising future.

WAM Microcap Ltd (ASX: WMI)

The other high-yielding ASX share I want to highlight is this listed investment company (LIC), which focuses on exciting, small businesses.

I think small ASX shares can be undervalued, and they're usually earlier on with their growth journey, meaning they could outperform their larger counterparts.

I believe it's the above dynamic that has helped the WAM Microcap deliver an average return per year of 14.4% since inception in June 2017, before fees, expenses and taxes.

LICs pay for their dividends from investment profits and profit reserves. This allowed the business to grow its annual ordinary dividend each year between FY18 and FY23, maintain it in FY24, then increase it again in FY25 and FY26.

The high-yielding ASX share expects to pay an annual dividend per share of 10.7 cents in the 2026 financial year. This projection translates into a forward grossed-up dividend yield of 10.4%, including franking credits, at the time of writing.

These aren't the only ASX shares I'd buy for dividends, but they have two of the highest yields.

The post 2 ASX shares with dividend yields above 8% appeared first on The Motley Fool Australia.

The error that many investors make is thinking they need a million dollar investment portfolio to make it worth it.

The truth is, you don't need to spend millions, or even hundreds of thousands. Any level of passive income can help contribute to your financial independence and also create a buffer against sharemarket volatility.

So, what could that passive income actually look like?

Let's break it down, using a $50,000 investment portfolio as an example. 

What passive income can I earn off a $50,000 portfolio?

The easiest way to calculate your passive income is by multiplying your total portfolio value by your dividend yield.

But, the tricky part is that the answer varies widely depending on the dividend yield of your portfolio.

For example, $50,000 x 3% = $1,500 per year in dividend payments.

But if your portfolio has a dividend yield of around 6%, your passive income will be double the size. That's because $50,000 x 6% = $3,000 per year in dividend payments. 

And so on. As your dividend yield increases, the passive income you can earn off your $50,000 portfolio also increases.  

These figures are based on cash dividends before any tax or franking credit benefits.

Of course, this type of money isn't going to become a primary income stream, but it'll certainly help create an extra buffer.

Which ASX shares will earn me $2,000 per year in passive income?

To earn an annual passive income of around $2,000, your portfolio will need to yield around 4%.

There is a huge range of ASX dividend shares available that pay around that level, so it's certainly achievable.

For example, Argo Investments (ASX: ARG) pays just a little over the 4% mark at the time of writing. As does WCM Global Growth (ASX: WQG).

Major bank Westpac Banking Corp (ASX: WBC) pays a dividend yield of around 4.2% to its shareholders.

ANZ Group Holdings Ltd (ASX: ANZ) and Transurban Group Ltd (ASX: TCL) both pay a little more. Their dividend yields are around 4.6% and 4.7%, respectively.

Of course, ideally, you'd want a mixture of shares that combine to make a 4% yielding portfolio for diversification reasons, rather than a portfolio of only one stock.

What if I want to earn closer to $4,000 per year? Is that possible?

It's also possible to earn a little more. To earn $4,000 in passive income, you'd need a portfolio that yields 8%. 

Again, there are plenty of ASX shares that yield around this level, but it's worth noting that a higher yield generally comes with higher risk.

The Metrics Income Opportunities Trust (ASX: MOT) is a listed investment trust (LIT) which can give investors direct exposure to private credit investments. The Trust targets a cash yield of 7% per year. It has a total target return of 8% to 10% per year, net of fees and expenses. 

Charter Hall Long WALE REIT (ASX: CLW) and WAM Microcap (ASX: WMI) both yield in the low 7%.

And if you're looking to target higher-yielding ASX shares, there are stocks like intellectual property (IP) service provider IPH Ltd (ASX: IPH), which yields around 9.6% and Centuria Office REIT (ASX: COF), which yields around 11.4%, at the time of writing.

Again, I wouldn't suggest investing solely in high-yield shares in order to earn a higher income. But it's possible to create a portfolio mix including high-yield ASX shares and more reliable or defensive assets to get an over 8% yielding portfolio. 

The post How much passive income can I earn off a $50,000 portfolio? appeared first on The Motley Fool Australia.

I love passive income, but the higher the yield the less likely it is to be sustainable because the business is paying out such a large part of its profit each year.

However, WAM Microcap is a bit different to a regular business that sells products or services because it's a listed investment company (LIC). In other words, it buys and sells shares to make money for shareholders.

It's not looking within the S&P/ASX 200 Index (ASX: XJO) for opportunities though. It's searching for the most exciting undervalued growth opportunities in the Australian microcap market.

Let's explore why it's such a compelling choice for dividends.

LICs need to produce returns

For a LIC to pay sustainable, large dividends, they need to generate good investment returns.

If a LIC's portfolio generates a double-digit net return over a financial year, then it has essentially done enough to pay a 10% grossed-up dividend yield (including the franking credits).

LICs are not just passive index funds. They can invest very differently to an index, both in terms of the shares they buy and the prices they buy and sell at.

WAM Microcap's hunting ground represents an area of the market that few fund managers look. There can be some excellent opportunities at the small end of the market because they can be mispriced for their potential and the business can deliver a lot of profit growth from a small base.

The ASX share's portfolio has delivered an average return per year of 14.4% since inception in June 2017, before fees, expenses and taxes. That's despite this decade being a tricky period for small-cap shares.  

I believe WAM Microcap's investment team have the ability to continue making good returns to fund future dividends.

Large dividend yield

WAM Microcap's board of directors has provided guidance that the business plans to pay an annual dividend per share of 10.7 cents for FY26. That translates into a grossed-up[ dividend yield of around 10.5%, including franking credits.

It has increased its annual dividend per share each year since FY18 (when it started paying dividends), aside from FY24 when it maintained the payout. That's a strong record of consistency for investors.

The business has a profit reserve of 49.8 cents per share of profit which it built in previous years. That means it could pay the same dividend level for four and a half years without needing to earn any investment returns.

I think Aussies are missing out if they don't have exposure to small-cap shares for both the diversification and potential returns. WAM Microcap can provide that exposure, along with a great dividend yield level.

There are also other ASX shares that could make great investments today to own for the long-term.

The post This 10% dividend yield stock is one I'm comfortable holding for the long-term appeared first on The Motley Fool Australia.

We're going to look at two ASX dividend shares with exceptionally high dividend yields. They offer significantly more income than the current interest rate on cash in the bank.

Below are two of my favourite ideas for large dividend yields.

Future Generation Australia Ltd (ASX: FGX)

Future Generation Australia is a listed investment company (LIC) offering shareholders a large and growing dividend.

Instead of being managed by one fund manager, this LIC's money is managed by 16 different fund managers who all work for free so that Future Generation Australia can donate 1% of its net assets each year to youth charities – a great initiative.

This portfolio is significantly less exposed to the largest 10 businesses on the ASX, making it much more diversified, in my opinion. It gives exposure to more than 430 underlying securities.

Future Generation's portfolio has outperformed the S&P/ASX All Ordinaries Accumulation Index (ASX: XAOA), returning an average of 0.9% per annum more than the index between inception in September 2014 and May 2026. I think it helps to look at smaller, faster-growing businesses.

The solid investment returns have allowed this ASX share to steadily increase its payout each year since 2015 – that's a decade of dividend growth! The business recently announced a 5.5% increase of its interim dividend and gave guidance of an annual dividend per share of 7.6 cents per share for FY26.

In other words, it's guiding it will pay a grossed-up dividend yield of around 8% for 2026, including franking credits.

WAM Microcap Ltd (ASX: WMI)

WAM Microcap is the other ASX share I want to highlight. It's also a LIC, targeting the most exciting undervalued growth opportunities in the Australian microcap market.

As an example of the businesses in the portfolio, some of its current holdings include Artryra Ltd (ASX: AYA), Beacon Lighting Group Ltd (ASX: BLX), EchoIQ Ltd (ASX: EIQ), FINEOS Corporation Holdings PLC (ASX: FCL) and Kogan.com Ltd (ASX: KGN).

Its investment performance has been solid, with its portfolio delivering an average return per year of 14.4% since inception in June 2017, before fees, expenses and taxes.

Due to that high level of passive income, the business has regularly increased its annual dividend since FY18, with no dividend reductions during that period (along with a few special dividend payments).

WAM Microcap has provided guidance that it will pay an annual dividend per share of 10.7 cents in FY26. That translates into a grossed-up dividend yield of 10.5%, including franking credits, at the time of writing. It's hard to find a business with a consistent dividend that has a larger yield than that.

These aren't the only businesses offering appealing dividend income on the ASX.

The post 2 ASX shares with dividend yields above 7.5% appeared first on The Motley Fool Australia.

Labor and the Greens have reportedly struck a deal to pass the capital gains tax (CGT) and negative gearing changes announced in the Federal budget, while including a new measure to end SMSF borrowing to buy properties.

With that change in mind, I think there are still plenty of compelling investment opportunities, particularly on the ASX share market.

Commercial properties AKA real estate investment trusts (REITs)

SMSF investors could decide to invest in commercial properties instead, which may provide a higher yield than residential properties.

I like investing in real estate investment trusts (REITs) because they're easy to transact on the ASX. We can buy into a portfolio of properties in a single investment, and the properties are managed for us by property fund managers.

There are various REITs to choose from, including ones based on industrial properties, farmland and so on.

Three of my favourites in the sector include Rural Funds Group (ASX: RFF), which owns farmland, Centuria Industrial REIT (ASX: CIP), which owns industrial property, and Charter Hall Long WALE REIT (ASX: CLW), which owns a diversified portfolio of properties with long leases.

There are other REIT sectors, like shopping centres and office buildings, though they face headwinds, so I'd be very selective about those two areas and only buy REITs at an attractive discount to their net asset value (NAV).

ASX dividend shares with fully franked dividends

An even more attractive area to invest could be companies that pay attractive, fully franked dividends. Franking credits are refundable tax offsets, which are great for Australian SMSF investors.

ASX blue-chip shares could be some of the most reliable businesses to own. I'm thinking of names like Telstra Group Ltd (ASX: TLS), Bunnings and Kmart owner Wesfarmers Ltd (ASX: WES) and Coles Group Ltd (ASX: COL). They each have a solid dividend yield and a track record of increasing their dividends annually over the last few years.

There are a few other S&P/ASX 200 Index (ASX: XJO) shares that have a strong track record of reliability, including Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) and APA Group (ASX: APA). Lovisa Holdings Ltd (ASX: LOV) and JB Hi-Fi Ltd (ASX: JBH) also have an impressive track record of growing dividends over the long-term.

Finally, I'm a big fan of listed investment companies (LICs), which allow investors to diversify and gain exposure to quality assets while also receiving attractive dividend yields and growing payouts.

Some of my favourite LICs for passive income are MFF Capital Investments Ltd (ASX: MFF), WCM Global Growth Ltd (ASX: WQG), L1 Long Short Fund Ltd (ASX: LSF), Future Generation Global Ltd (ASX: FGG), Future Generation Australia Ltd (ASX: FGX), Hearts and Minds Investments Ltd (ASX: HM1) and WAM Microcap Ltd (ASX: WMI).

The post Where should I invest inside SMSFs instead of property? appeared first on The Motley Fool Australia.

Businesses don't need to be growing earnings at a huge pace to deliver strong returns if they're priced cheaply with a generous dividend payout ratio.

Let's take a look at two businesses that have exceptionally high dividend yields that are too good to miss.

Universal Store Holdings Ltd (ASX: UNI)

Universal Store says it owns a portfolio of premium youth fashion brands, selling through stores, online and wholesale. Its main two brands are Universal Store and Perfect Stranger. It has more than 121 physical stores across Australia, serving "fashion focused customers".

On the dividend side of things, the business has increased its annual dividend per share each year since it started paying in 2021. Considering that record stretches through the inflation period of 2022 and 2023, I think that's very impressive for a retailer.

Universal Store has a strong track record of sales growth, as well as steady expansion of its store network across the country, including the fast-growing Perfect Stranger brand. In FY26 to week 43, Universal Store brand sales rose 11.8% and Perfect Stranger sales grew 39.8%, with like for like (LFL) sales growth of 8.5% and 12.9%, respectively.

With the mid-point of its FY26 guidance, which it hasn't retracted, total sales are expected to grow 11.5% and operating profit (underlying EBITA) could grow 15.4%.

Using the forecast on Commsec, the business is projected to pay a grossed-up dividend yield of 8.2%, including franking credits, at the time of writing.

WAM Microcap Ltd (ASX: WMI)

The other ASX share I want to highlight with a high dividend yield is WAM Microcap, a listed investment company (LIC) that only targets the smallest businesses on the ASX.

I think small-caps are the most exciting businesses to look at because they are earlier on with their growth journeys and may be very mis-priced by the market for its growth prospects. But, small-caps can also be volatile year to year.

Despite small caps having a rough time in the last few years, the WAM Microcap portfolio has still managed to deliver an average return per year of 14.1% (before fees, expenses and taxes) since June 2017.

The net return has been strong enough for the business to deliver a very large dividend yield and still deliver slight growth in its dividend payments.

The ASX dividend share has increased its annual dividend per share every year since FY18 when it first started paying a dividend, aside from FY24 when it maintained its annual dividend.

It expects to pay an annual dividend per share of 10.7 cents per share in FY26 – this translates into a grossed-up dividend yield of 10.6%, including franking credits.

The post 2 ASX shares with dividend yields above 8% appeared first on The Motley Fool Australia.

The investment team from the listed investment company (LIC) WAM Microcap Ltd (ASX: WMI) believe the online retailer is one of the most exciting and undervalued growth opportunities in the Australian microcap market.

At the end of May, Kogan.com was one of the largest 20 positions in the WAM Microcap portfolio. Let's take a look at why it's so appealing to the experts from Wilson Asset Management.

Ongoing growth for the ASX share

WAM noted that in May, the business released a business update for the 10 months to 30 April 2026, which demonstrated continued sales growth in the core Kogan.com business and improved operating leverage.

The fund manager said that Mighty Ape, the New Zealand-based online retailer acquired by Kogan in 2020, has made significant progress to profitability through strategic shifts and the progressive implementation of the Kogan operating model across the business.

In the four months to 30 April 2026, Mighty Ape's gross profit margin improved by 8.4% to 37.8%, while the adjusted operating profit (EBITDA) losses reduced by 52.8% compared to the prior corresponding period.

For the overall business, the ASX share reported gross sales growth of 13.2% to $875.6 million, driven by 18.2% growth in Kogan.com.

Group active customers increased by 4% to 3.5 million as at 30 April 2026, with Kogan.com active customers increasing by 9%.

Group revenue rose 6% to $433.7 million, with 18.1% growth for Kogan.com. This helped adjusted operating profit (EBITDA) rise 17.4% to $37.5 million and adjusted EBIT grew 25.4% to $26.9 million.

Why the fund manager likes Kogan.com shares

WAM said that these improvements reflect a transition towards a simpler, more profitable operating model.

The fund manager concluded:

We see scope for continued earnings recovery in Mighty Ape and expect the company's price leadership will continue to win market share in the current tougher macro environment. We also believe Kogan will be a beneficiary of artificial intelligence (AI), with respect to both revenue and cost savings.

In a world with a higher cost of living, the outlook seems promising for the business and its revenue and earnings growth reflects this. Operating leverage is a very powerful force for a business like this ASX share. But, Kogan.com isn't the only attractive opportunity out there, of course.

The post Why this small ASX share could generate big returns! appeared first on The Motley Fool Australia.

Passive income received in superannuation in the retirement portion of life could be tax-free. Isn't that appealing?

Readers may be wondering how much an investor would need to receive a large amount of dividends each year. Let's take a look at the required amount for that goal.

$9,000 of passive income each month from superannuation

Getting $9,000 per month would be $108,000 each year. That'd be a very satisfactory amount for most Australians and could fund a comfortable lifestyle.

How large the nest egg needs to be to receive $108,000 per year essentially boils down to what the portfolio yield is.

For example, if someone's portfolio had an average dividend yield of 5%, they'd need a $2.16 million portfolio.

But, if the average dividend yield was 7.5%, an investor would need a $1.44 million portfolio.

If the average dividend yield were 3%, then an investor would require a portfolio size of $3.6 million.

There are plenty of options when it comes to aiming for these sorts of yields. I'll point to a few ASX shares below. I have invested in a number of the names below to create a diversified, strong portfolio with a good yield and still have compelling growth prospects.  

Which ASX dividend shares I'd buy

There isn't one right answer when it comes to investing for passive income in superannuation.

But it's true that a business with a lower dividend yield may be investing more of its earnings back into itself to drive more growth for shareholders.

Some of the impressive businesses with a lower dividend yield include Lovisa Holdings Ltd (ASX: LOV), Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) and Wesfarmers Ltd (ASX: WES). I expect pleasing compounding of the dividend payout over the next three to five years.

Some of the compelling ASX dividend shares with a dividend yield of around 5% are names like exchange-traded fund (ETF) WCM Quality Global Growth Fund (ASX: WCMQ), listed investment company (LIC) Long Short Fund Ltd (ASX: LSF) and industrial real estate investment trust (REIT) Centuria Industrial REIT (ASX: CIP).

Turning to the higher-yield options I'd consider, names that spring to mind include WCM Global Growth Ltd (ASX: WQG), Future Generation Australia Ltd (ASX: FGX), Future Generation Global Ltd (ASX: FGG) and WAM Microcap Ltd (ASX: WMI).

The post How much is needed in superannuation to target a $9,000 monthly passive income? appeared first on The Motley Fool Australia.

The average return of the ASX share market over the long-term has been around 10%. How great would it be to receive that level of return just from the cash payments?

Of course, higher yields do come with their risks. That yield may be high because investors are expecting the business' profit and payout to reduce sooner rather than later. Or, the yield could be really high because the dividend payout ratio is unsustainably high.

The following two businesses currently offer yields above 10%.

I don't know what size the payouts will be in the coming years, but I expect the dividend yields will remain very high for the foreseeable future, keeping in mind the payout could be reduced somewhat from where it is today.

Let's find out about those two businesses.

Centuria Office REIT (ASX: COF)

This business is a real estate investment trust (REIT) that owns office properties across Australian metropolitan locations.

The share price has suffered a significant decline over the last few years because of the headwinds of work-from-home and higher interest rates.

However, it's still generating plenty of rental income and is signing new leases. In the FY26 third-quarter update, it reported that during the period, 5,742sqm of lease terms were agreed across 11 transactions including 2,263sqm of new leases and 3,479sqm of renewals with the majority of these transactions in Brisbane.

Pleasingly, the business reported a re-leasing spread of 8.6%, with strong rental growth from the Fortitude Valley and Hamilton assets.

The ASX share's portfolio currently has a four-year weighted average lease expiry (WALE), with a 90% portfolio occupancy, which I'd view as solid statistics, considering all of the factors going on.  

Additionally, it also reported it has refinanced $1 billion of debt refinancing across its debt book, resulting in a 30 basis point (0.3%) debt margin reduction and an extension of the weighted average debt expiry from 2.6 years to 4.3 years.

The business highlights limited supply of new office space, with there being a "significant disconnect between replacement costs and current valuations".

The ASX share also noted that the "widening gap of economic rents to prevailing market rents not only prohibits feasible office development but provides ample room for current market rents to continue to grow and underpin future valuations."

Its expected FY26 distribution of 10.1 cents per security translates into a dividend yield yield of around 11%.

WAM Microcap Ltd (ASX: WMI)

WAM Microcap is a listed investment company (LIC) that invests in small ASX shares with big growth potential.

Any sized business can produce returns, but the smaller we go down the market capitalisation list, the less-researched the stocks are and the better potential they have to produce stronger strong returns.

Past performance is not a guarantee of future returns of course, but WAM Microcap's portfolio has returned an average of 14.2% since its inception in June 2017, before fees, expenses and taxes. Those returns have been large enough to pay a very sizeable dividend.

It expects to slightly increase its annual dividend per share to 10.7 cents per share. That translates into a grossed-up dividend yield of 10.75% from the ASX share.

Of the two names I've highlighted, I'd rather buy WAM Microcap because it's increasing its payout and it offers diversification. But, the REIT could be significantly undervalued at this level.

The post 2 ASX shares with dividend yields above 10% appeared first on The Motley Fool Australia.

Passive income received in superannuation during the retirement phase has a good chance of being tax-free. How great is that?

So, the question is, how much would it take to receive a sizeable amount of dividends each year? Let's take a look.

$3,000 of passive income each month from superannuation

Receiving $3,000 equates to $36,000 per year. That's not a gigantic amount, but it could be enough to be an essential part of a retiree's finances.

How large the nest egg needs to be to receive $36,000 per year is largely related to what the portfolio yield is.

For example, if someone's portfolio had an average dividend yield of 3.6%, then they'd need a $1 million portfolio to receive $36,000.

But, if the portfolio average dividend yield was actually 7.2%, then an investor would only need a $500,000 portfolio.

If the portfolio had a 4.8% dividend yield then an invest would need a portfolio value of $750,000.

There are plenty of options when it comes to aiming for these sorts of yields, so I'll highlight a few names below. For my own portfolio, I have invested in a mix of names to create a strong dividend portfolio.

Which ASX dividend shares I'd buy

If an investor is targeting a relatively low (3.6%) passive income yield in superannuation, or outside of superannuation, then I'd consider names like investment conglomerate Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), Kmart and Bunnings owner Wesfarmers Ltd (ASX: WES), global jewellery business Lovisa Holdings Ltd (ASX: LOV) and funeral provider Propel Funeral Partners Ltd (ASX: PFP).

Among the mid-range yield (around 5%) names, I appreciate listed investment company (LIC) L1 Long Short Fund Ltd (ASX: LSF), industrial property owner Centuria Industrial REIT (ASX: CIP), farmland landlord Rural Funds Group (ASX: RFF), telco Telstra Group Ltd (ASX: TLS) and quality global shares-focused exchange-traded fund (ETF) WCM Quality Global Growth Fund (ASX: WCMQ).

Some of the higher-yield (more than 7%) names that I like include LICs WCM Global Growth Ltd (ASX: WQG), MFF Capital Investments Ltd (ASX: MFF), WAM Microcap Ltd (ASX: WMI), and diversified property landlord Charter Hall Long WALE REIT (ASX: CLW).  

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Superannuation has a low tax rate compared to individuals, trusts and companies. Plus, it's easy to invest for the long-term through the investment vehicle.

It's important to remember that the net income is an after-tax figure. An Australian working full-time could lose approximately a third of their passive income return to tax.

Therefore, investing in superannuation is a much more appealing prospect compared to other options. Superannuation has a lower tax rate in the accumulation phase than the standard individual tax rates for a full-time earner. In retirement, the tax rate could be 0%.

However, every Australian's tax position is different, so we're going to look at targeting a particular income level without mentioning tax any further.

How much is needed in superannuation for $7,500 of monthly passive income

Receiving $7,500 in dividends per month translates into $90,000 per year. I reckon many Australians would love to receive that level of dividends each year without having to do any ongoing work for it.

Australian investors need to decide what investments they want to own and the dividend yield that comes with that.

A portfolio with a dividend yield of 7% can be half the size of a portfolio with a dividend yield of 3.5% and earn the same level of passive income.

For example, if a portfolio were $1.3 million in size, it would generate $91,000 of annual passive income with a 7% dividend yield. If a portfolio had a dividend yield of 3.5%, the portfolio would need to be $2.6 million in size to generate the same level of cash payments.

To generate almost exactly $90,000 of annual passive income with a 7% dividend yield, an investor would need a portfolio size of $1.286 million.

A 5% dividend yield would require a portfolio size of $1.8 million to make $90,000 annually.

A 4% dividend yield would require a portfolio size of $2.25 million.

The types of ASX dividend shares I'd want to buy

If a superannuation investor is targeting mid-to-higher dividend yields, then I'd look at reliable and discounted real estate investment trusts (REITs), growing companies with a generous dividend payout ratio and listed investment companies (LICs) with a good track record of dividends.

Appealing businesses with a dividend yield of around 5% to 6%, in my view, include WCM Quality Global Growth Fund (ASX: WCMQ), Telstra Group Ltd (ASX: TLS), Rural Funds Group (ASX: RFF), Centuria Industrial REIT (ASX: CIP), Australian Foundation Investment Co Ltd (ASX: AFI) and Argo Investments Ltd (ASX: ARG).

Businesses with a higher dividend yield include Future Generation Global Ltd (ASX: FGG), Future Generation Australia Ltd (ASX: FGX), Hearts and Minds Investments Ltd (ASX: HM1), WCM Global Growth Ltd (ASX: WQG), WAM Leaders Ltd (ASX: WLE), WAM Microcap Ltd (ASX: WMI) and Charter Hall Long WALE REIT (ASX: CLW).

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That's because I really like the potential of a higher income return, potential payout growth and possible long-term capital growth.

When I think about two ideas with very high yields, growing payouts and the potential for capital growth, the following two names are ones that spring to mind.

Future Generation Australia Ltd (ASX: FGX)

Future Generation Australia is an almost unique listed investment company (LIC) which is invested in a portfolio of funds from more than a dozen fund managers who all work for free so that the LIC can donate 1% of its net assets each year to youth charities.

I like the investment strategy of the LIC to give more exposure to small and medium businesses than the S&P/ASX 300 Index (ASX: XKO) because I think those companies can deliver stronger long-term earnings growth (and hopefully share price growth).

Impressively, Future Generation Australia is invested in more than 400 shares across different sectors, so it does give investors pleasing levels of diversification, in my view.

As a LIC, Future Generation Australia has control over the size of the dividend that it declares, as long as it has the profit reserve to do so.

The ASX dividend share has increased its payout each year since 2015 – a decade of dividend increases! Its 2025 payout translates into a grossed-up dividend yield of close to 8%, including franking credits. I think that's a great starting yield.

WAM Microcap Ltd (ASX: WMI)

WAM Microcap is another LIC, though this one offers much more specific investment exposure. It focuses purely on small-caps, which can be some of the most little-known, exciting opportunities on the ASX.

I think WAM Microcap's portfolio of shares could be both undervalued and have lots of growth potential.

It's invested in dozens of shares, though not quite as many as Future Generation Australia.

In its April update, WAM Microcap said that its portfolio had delivered an average return per year of 14.2% since inception in June 2017, excluding fees, expenses and taxes. That's double the return of its benchmark.

Since FY18, the ASX dividend share has increased its payout almost every year, aside from FY24 when it maintained the annual dividend.

Its projected dividend for FY26 is 10.7 cents per share, which translates into a grossed-up dividend yield of 10.3%, including franking credits.

With that level of yield, I'm only expecting slight annual dividend growth for the foreseeable future, but that'd be exceptional levels of passive income each year.

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WAM Microcap is certainly not as high profile as names like Commonwealth Bank of Australia (ASX: CBA) and BHP Group Ltd (ASX: BHP), but I think it could better for dividend income in the years ahead.

The job of a LIC is to invest in other shares/assets that the investment team believes can deliver pleasing returns. WAM Microcap specifically aims to invest in the most exciting undervalued growth opportunities in the Australian microcap market.

Let's look at three reasons why I think this ASX dividend share is a good, long-term buy.

Good performance

With LICs, I think it's important to look at the capability of that LIC to deliver good returns. Only good ones are worth investing in.

A LIC pays for its dividends from the net investment returns that it generates. For a dividend to be sustainable, a LIC needs to generate strong enough returns to pay those payments (and hopefully more for capital growth).

I believe the WAM Microcap investment team are very skilled at finding investment opportunities at the small-cap end of the market to help outperform the broader ASX share market.

In its April 2026 update, WAM Microcap said that its portfolio had generated an average return per year of 14.2% since inception in June 2017, twice as good as the small-cap market return.

This great performance over the long-term has allowed WAM Microcap to grow its profit reserve to 55.4 cents per share.

Great dividend yield

One of the main reasons why the business is a compelling passive income idea is that it pays a very large dividend yield.

The ASX dividend share expects to pay an annual dividend per share of 10.7 cents in FY26.

That means, at the timing of writing and the current WAM Microcap share price, it offers a FY26 grossed-up dividend yield of around 9.5%, including franking credits.

There are not many ASX dividend shares with a dividend yield that high that I expect can continue growing the payout.

Track record of payout growth

The LIC has grown its annual dividend almost every year since FY18, with the only year it didn't grow the payout being FY24.

It started paying a dividend in FY18 and then increased its payout in FY19, FY20, FY21, FY22, FY23, FY25 and FY26.

If I invest in an ASX dividend share, I want to have a high level of confidence the business is likely to increase the payout again in the following financial year. With the large profit reserve, I think WAM Microcap is capable of ongoing dividend growth.

Even a slight increase each year is very welcome to help offset inflation impacts.

But, WAM Microcap isn't the only ASX share I'd consider for long-term passive income.

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A small group of ASX shares are set to go ex-dividend in May.

In order to receive a dividend, you must own the ASX share before its ex-dividend date.

So, if you're looking for some income opportunities this month, these ASX shares may be of interest.

Ex-dividend dates also provide another opportunity.

Share prices typically fall on their ex-dividend dates, so you may be able to pick up a stock you've been watching for a lower price.

Among the shares going ex-dividend this month are ASX 200 gold share Newmont Corporation CDI (ASX: NEM).

Newmont will trade ex-dividend on 26 May. The miner will pay investors a dividend of 25.4 cents per share on 22 June.

Several of Wilson Asset Management's listed investment companies (LICs) will also go ex-dividend this month.

These include Wam Capital Ltd (ASX: WAM), which will trade ex-dividend on 18 May.

Wam Capital investors will receive a dividend of 7.75 cents per share on 29 May.

ASX shares with ex-dividend dates this month

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The risks are certainly higher, the lower down the market capitalisation list you go. Brand power isn't that strong and balance sheets haven't developed to their full potential.

WAM Microcap Ltd (ASX: WMI) is one of the funds that's focused on finding some of the most exciting opportunities at the small end of the market. The LIC recently highlighted two ASX small-cap shares in the portfolio that are exciting opportunities.

Duratec Ltd (ASX: DUR)

WAM described Duratec as a specialist infrastructure services company providing remediation, protection and energy services across civil, marine, mining and defence sectors.

The fund manager noted that Duratec's share price increased in March, supported by continued positive momentum after the release of the FY26 half-year result.

Duratec reported solid earnings in line with expectations, reinforcing investor confidence in its growth outlook and driving upward revisions to earnings forecasts.

Momentum was further supported by the award of a $45 million contract in Papau New Guinea (PNG) which was announced towards the end of March 2026. This highlights the ongoing expansion of the business.

WAM said the rising Duratec share price performance during the month reflected investor confidence in Duratec's earnings trajectory, project pipeline and execution capability, as well as the ASX small-cap share's exposure to resilient customer markets such as the defence sector.

Autosports Group Ltd (ASX: ASG)

WAM described Autosports as a motor vehicle dealership operator and provider of automotive services, focusing on the luxury and prestige segment.

The Autosports share price declined in March, reflecting market weakness across interest rate-sensitive stocks maid ongoing interest rate uncertainty.

On top of that, as part of the free trade agreement between Australia and the EU, which was signed on 24 March 2026, the luxury car tax threshold was increased for electric vehicles only, despite wider expectations that it would be completely abolished for all vehicles.

WAM believes that the March pullback does not reflect a deterioration in the company's strategic position.

The fund manager concluded its commentary on the ASX small-cap share by saying the team still view Autosports Group as well-placed to execute on strategic mergers and acquisitions in a highly fragmented industry.

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With inflation and interest rates seemingly on the rise, I think investors may be looking for names that can beat what interest rates bank savings accounts are likely to provide.

I want to highlight two ASX dividend shares that have never given their shareholders a dividend reduction, have a good track record of dividend increases, and have an incredible dividend yield.

WCM Global Growth Ltd (ASX: WQG)

WCM Global Growth is a listed investment company (LIC) that's managed by WCM, which is based in Laguna Beach, California. It's deliberately based a long way away from Wall Street (in New York).

This LIC targets a global portfolio of shares, which I think is a good strategy because there are thousands of opportunities to choose from.

WCM has whittled down its portfolio to just 20 to 40 stocks from that global hunting ground.

There are two factors that WCM wants to see particularly – improving economic moats and a corporate culture that supports the strengthening of those competitive advantages.

This strategy has allowed the ASX dividend share's portfolio to deliver a net return that's stronger than the global share market over the past year, three years and since the LIC's inception in June 2017.

WCM Global growth's net portfolio return has been an average of 15.8% per year since inception, allowing it to pay a growing dividend each year since it started paying one in 2019. Of course, past investment returns are not a guarantee of future returns.

The business has provided guidance that its quarterly dividend will continue growing every quarter until March 2027.

At the time of writing and according to guidance, the next four quarterly dividends to be declared will come to a grossed-up dividend yield of just over 8%, including franking credits. 

WAM Microcap Ltd (ASX: WMI)

It's my view that ASX small-cap shares are some of the most exciting investments to own because of their large growth potential and how early on in their growth journey we can invest in them.

For example, imagine there's a business that now makes $100 million in revenue. Wouldn't it have been great to have bought it when it was making just $10 million in revenue? We could look forward to owning it as it multiplied its sales by ten times.

Not every business is destined to grow 10x from its current scale, which is why I think it could be smart to leave the investing to a seasoned team of small-cap fund managers working full-time that have performed very well over the long-term.

Between inception in June 2017 to February 2026, the WAM Microcap portfolio has returned an average of 15.4% per year (before fees, expenses and taxes), outperforming the small-cap benchmark by 7% per year in that time.

That strength has allowed the ASX dividend share to increase its annual payout every year except FY24, going back to FY18 when it started paying a dividend.

Recent dividend increases have been small, but I think any growth is very appealing given it has such a large dividend yield. At the time of writing, the FY26 grossed-up dividend yield is guided to be around 10.2%, including franking credits.

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Some businesses are able to provide a high dividend yield because of a mixture of a relatively low price-earnings (P/E) ratio and a generous dividend payout ratio.

I'd put listed investment companies (LICs) into a somewhat separate category of ASX dividend stocks because they generate profits differently from other businesses.

Instead of selling goods or services, a LIC makes money by generating returns by investing in shares. LICs can then build up accounting profits, paying out a portion each year and retaining some of the gains (with a profit reserve in accounting terms) for when markets aren't performing.

The LIC I want to highlight is WAM Microcap Ltd (ASX: WMI). I think it's a strong ASX dividend stock pick for three reasons.

Impressive investment returns

A key element of LIC's success has been its focus on buying "the most exciting undervalued growth opportunities" in the Australian microcap market.

ASX small-cap shares can deliver great returns because of how early on in their growth journey they are. It's usually much easier for a business to double its revenue from $10 million to $20 million than it is to go from $1 billion to $2 billion.

WAM Microcap is very effective at generating returns thanks to its investment style and the size of the businesses it deals with. Between inception in June 2017 and February 2026, the portfolio return was an average of 15.4% per year, outperforming the small-cap benchmark by around 7% per year, before fees, expenses and taxes.

The WAM strategy is to invest in growing businesses where there's a catalyst that could send the share price higher.

That level of return means the ASX dividend stock is capable of delivering a large dividend and capital growth for the LIC.

Large and growing dividend yield

The LIC has been steadily growing its annual payout each year since FY18 – the only year it hasn't increased its payout was FY24, when it was maintained at 10.5 cents per share.

In FY26, the LIC is expecting to increase its annual payout by 1% to 10.7 cents per share.

Therefore, the ASX dividend stock could provide a grossed-up dividend yield of around 10.25%, including franking credits, at the time of writing.

That's a great starting dividend yield, in my view, and it could continue to grow.

Sizeable profit reserve

One of the key reasons WAM Microcap can be such a stable dividend payer is that it has built up a sizeable profit reserve to pay future dividends.

At 27 February 2026, it had built up a profit reserve of 55.4 cents per share. That means it has the accounting profits to pay around five years of dividends at the current level, even if it didn't make any more profit in that time.

I think this ASX dividend stock is a very appealing business, and it looks like a good time to buy after dropping 13% since mid-January 2026.

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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.

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.

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