If I were investing for a second income, I'd want to choose ASX shares that seem as dependable as job earnings and also regularly increase their payouts.

I'd like to highlight two ASX shares that I think are great options for a second income (or retirement income).

WCM Global Growth Ltd (ASX: WQG)

This is a listed investment company (LIC) – the job of a LIC is to invest in other shares on behalf of shareholders. The fund manager of this LIC is WCM, which is based in Laguna Beach, California.

One of the first advantages of this LIC is that it gives investors exposure to a portfolio of global shares, which is appealing to get exposure to different opportunities around the world, not just the typical ones on the ASX.

WCM wants to find great businesses with expanding economic moats (improving competitive advantages) and a company culture that fosters the expansion of those advantages.

When it comes generating a second income, the LIC has a great track record of delivering dividends and payout growth.

It has increased its annual dividend each year since 2019 and fairly recently changed to paying its dividend quarterly.

The business has guided that it's going to increase its quarterly dividend each quarter between now and March 2027. The quarterly dividend that's expected to be paid in March 2072 is 2.45 cents per share, which translates into a grossed-up dividend yield of close to 8%, including franking credits, at the time of writing.

As a bonus, it's likely trading at a discount to its net tangible assets (NTA) – that's the underlying value of each share.

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

The other ASX share I want to highlight for unlocking a second income is Soul Patts, one of the oldest companies on the ASX.

It was listed more than 120 years ago and it has paid a dividend every year in that time, including through wars, global pandemics and economic recessions.

The business is an investment conglomerate that started as a pharmacy business and now has a diversified portfolio across numerous areas.

Its investments include resources, telecommunications, energy, industrial property, swimming schools, agriculture, water entitlements, electrification, financial services, retail, healthcare, retirement living, credit and building products.

The company is a great option for a second income because of how consistently it increases its payout.

Soul Patts has increased its regular annual dividend per share every year since 1998, which is the longest growth streak on the ASX. I think the dividends are likely to continue growing because the business is committed to doing so, its dividend payout ratio is usually at a very healthy level each year and it's regular investing in new opportunities.

Its latest two half-year dividends come to a grossed-up dividend yield of 3.5%, including franking credits, at the time of writing.

The post Want to build a second income? I'd buy these ASX shares today appeared first on The Motley Fool Australia.

Superannuation is great for retirement investing, but I'm investing significantly outside of super to build up a flow of dividends to add to my near-term income.

The recent ASX share market volatility has led to share prices falling, dividend yields rising and more attractive opportunities. That's what attracted me to the following businesses with a $2,000 investment earlier this week.

MFF Capital Investments Ltd (ASX: MFF)

MFF is best-known for its listed investment company (LIC) activities because it runs a multi-billion dollar portfolio that is mostly invested in high-quality international shares that have above-average earnings growth prospects and good competitive advantages.  

It's invested in a number of leading global blue-chips, which has helped it to produce strong investment returns with the portfolio, leading to good capital growth (and dividend payments) in the past decade.

Recent investments include alternative investment/private equity managers, as well as ASX-listed investments L1 Group Ltd (ASX: L1G) and Montaka Global Fund (ASX: MOGL).

One of MFF's goals is to increase the dividend, which it has delivered over the past several years. I like how rapidly the business is growing the dividend – the guided FY26 annual payout is expected to grow by 23% year-over-year to 21 cents per share.

At the time of writing, that translates into a FY26 grossed-up dividend yield of 6.4%, including franking credits, from the ASX dividend share.

WCM Global Growth Ltd (ASX: WQG)

The other investment I made was another LIC, which also has a goal of regularly growing the dividend.

It's run by fund manager WCM which is based in Laguna Beach, California. That's a far cry from Wall Street, which allows the fund manager to invest somewhat differently to the market.

The fund manager invests in in businesses with growing economic moats (competitive advantages) and a corporate culture that supports the improvement of the economic moat.

WCM Global Growth's portfolio has returned an average of 14.7% per year since inception in June 2017, outperforming the global share market by an average of more than 2% per year.

It's increasing its quarterly dividend every quarter, which is a pleasing record to see during a time of higher inflation.

The ASX dividend share is expected to pay a quarterly dividend per share of 2.45 cents in March 2026, which would be an annualised grossed-up dividend yield of 8%, including franking credits.

The post 2 top ASX dividend shares I just bought for my portfolio with $2,000 appeared first on The Motley Fool Australia.

The recent jump in inflation is certainly leading to expectations of a rise in interest rates. The prospects are good for Aussies interested in term deposits.

However, despite that, I think it's an even better time to look at ASX dividend shares.

I'm expecting inflation to reduce in the future back to a more normal level, even if that takes a while, which could mean the lower share prices (and higher yield) today are worth jumping on whilst they're still available.

Washington H. Soul Pattinson and Co Ltd (ASX: SOL)

One of the main reasons I prefer ASX dividend shares to term deposits is the organic growth that businesses can deliver.

Companies can grow their earnings over time, enabling them to deliver rising dividend payments (offsetting inflation) and achieve capital growth.

I think Soul Patts is one of the best examples of this because the business has increased its dividend each year for the past 28 years in a row. There is no other company on the ASX with that history of dividend increases.

The only organic way a term deposit delivers any material income growth is when the RBA cash rate goes up. But interest rates can go down too, as we saw in 2025, hurting the interest rate on offer.

Dividend growth is not guaranteed, but I like the odds of this ASX dividend share hiking its payout this year and next year.

It has been able to deliver such consistent growth because of how it operates. It's an investment conglomerate that owns a portfolio of ASX shares, international shares, private businesses, property, and credit.

The company has deliberately built its asset base to be defensive and provide resilient cash flow, while also having growth potential. As it receives its portfolio's investment cash flow (mainly dividends), it enables Soul Patts to pay a higher dividend each year and retain a minority of that money to reinvest in more opportunities.

It currently has a grossed-up dividend yield of 3.6%, including franking credits. The somewhat low yield is partly a function of it having a very sustainable dividend payout ratio.

WCM Global Growth Ltd (ASX: WQG)

For investors looking for an ASX dividend share that can provide a stronger yield than a term deposit, I'd definitely look at this option.

It's a listed investment company (LIC) – its job is to invest in other shares on behalf of shareholders to generate good investment returns.

The LIC looks across the globe for opportunities, so it's a great option for Australians looking for diversification. Its ideas come from across the world, including the Americas, Europe, and Asia, as well as various sectors.

WCM Global Growth wants to find businesses with expanding economic moats (or improving competitive advantages), and these businesses must have a culture that supports a strengthening of the competitive advantages.

As a LIC, the business is able to decide on the level of dividends it wants to pay to shareholders. The ASX dividend share has been steadily increasing its payout over the last several years, and it has guided that its quarterly dividend will continue rising each quarter over the next year.

The LIC's guidance for the next four dividends to be declared comes to a grossed-up dividend yield of 7.7%, including franking credits, at the time of writing. I expect the payout will continue rising for the foreseeable future.

The post Forget term deposits! I'd buy these ASX dividend shares instead! appeared first on The Motley Fool Australia.

I'd want a good dividend yield, good growth potential and an attractive valuation.

The three stocks below really tick my boxes right now.

Centuria Industrial REIT (ASX: CIP)

I think this business, a real estate investment trust (REIT), could be one of the best ideas in the sector for finding rental growth.

It's an industrial property pure play with a national portfolio of buildings in locations where demand is strong and vacancy is low.

The ASX dividend share is benefiting from increasing demand related to tailwinds like a growing population, increasing e-commerce adoption, more data centres and so on.

In the FY26 half-year result, the business reported that its like-for-like net operating income (NOI) growth was 5.1% and it's expecting to grow its FY26 annual distribution to 16.8 cents per unit. That translates into a forward distribution yield of 5.8%, at the time of writing.

It also reported that its HY26 net tangible assets (NTA) were $3.95 per unit at 31 December 2025, so it's trading at a 27% discount to this at the time of writing.

WCM Global Growth Ltd (ASX: WQG)

This is a listed investment company (LIC) which looks to give investors exposure to a global portfolio of businesses with expanding economic moats and a business culture that fosters the improvement of the economic moat.

Competitive advantages are an important part of a business staying ahead of peers that want to take their market share. If those advantages are getting stronger, that's a signal the business has more power to make bigger profits.

The impressive investment returns the ASX dividend share has generated have allowed it to steadily increase its dividend over the last several years. At the moment, it's hiking its quarterly dividend every quarter.

It's expecting to pay a quarterly dividend of 2.45 cents per share in a year from now in March 2027. That translates into an annualised grossed-up dividend yield of 8.2%, including franking credits, at the time of writing.

The business is trading at a discount to its latest weekly NTA before tax of $1.81 at 27 March 2026.

Pinnacle Investment Management Group Ltd (ASX: PNI)

This business is invested in a portfolio of high-quality fund managers (affiliates) and helps them grow their business.

Pinnacle can provide a wide array of behind-the-scenes services to its affiliates such as compliance, legal and client distribution. This allows the fund managers to focus on what their clients are really paying for – investment professionals delivering investment returns.

When the share markets fall it hurts the funds under management (FUM), which in turn hurts the ASX dividend share's earnings potential in the shorter-term, but I think this cyclical nature makes it a good opportunity to buy during bear markets.

Pinnacle's expanding portfolio of affiliates have a long-term track record of largely outperforming their benchmarks and attracting new client FUM, which is a powerful combination for growing FUM and earnings.

According to the projection on Commsec, Pinnacle could pay an annual dividend per share of 62 cents in FY26, which translates into a grossed-up dividend yield of more than 5.5%, including franking credits, at the time of writing.

The post 3 top ASX dividend share buys for passive income in April appeared first on The Motley Fool Australia.

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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I think the best ASX dividend shares are ones that can provide a good dividend yield upfront, while also delivering payout growth and capital growth.

Last week I decided to take advantage of the lower share prices and invest in the ASX dividend share WCM Global Growth Ltd (ASX: WQG). It's a listed investment company (LIC) that I think offers a number of appealing aspects.

Yield

Passive income investors probably want to know about the dividend yield, so let's start there.

I like the LIC structure for dividends because of how it's up to the board of directors to decide on the level of the payout, assuming the company has the profit reserve to do so.

WCM Global growth has already issued dividend guidance for the year ahead. The next four quarterly dividends to be declared is expected to come to 9.3 cents per share, which equates to a grossed-up dividend yield of 8%, including franking credits, at the time of writing.

There are few LICs on the ASX that offer a yield that large and are delivering good payout growth.

Growth

The job of a LIC is to make investment returns for shareholders. With those investment profits, the ASX dividend share can deliver passive income.

It invests in a global portfolio of between 20 to 40 shares which are viewed as high-quality businesses with competitive advantages (economic moats) that are getting stronger.

Additionally, the fund manager looks for corporate cultures that are fostering those improving competitive advantages.

Since the LIC's inception in June 2017, it has delivered an average net return per year of 15.8% per year, outperforming the global share market return by an average of 2.7% per year.

That level of return is enough for the ASX dividend share to pay a large and growing dividend, while still delivering growth of the portfolio value over time.

Good value ASX dividend share

The final aspect of why I thought (and think) this was a good time to invest in the ASX dividend share was because it's trading at a cheaper price than its underlying value.

LICs regularly tell the market what the underlying value is with the net tangible assets (NTA) figure.

At the time of writing WCM Global Growth is trading at a 11% discount to the latest weekly NTA figure. That size of a discount is appealing, particularly when you consider how good the investment returns have been with the portfolio.

Additionally, I'm taking advantage of the dividend re-investment plan (DRP) to acquire shares at a slight discount.

The post Why I just made this great ASX dividend share my latest buy appeared first on The Motley Fool Australia.

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

If you've had your eye on an ASX share for a while, and you're ready to buy, the ex-dividend date can provide a deadline to act.

Might as well buy and pick up the next dividend payment if the stock is trading at an acceptable price, right?

Alternatively, you could play a longer game, and wait for the ex-dividend date to arrive before buying the stock.

This can be a good strategy because share prices tend to fall on the ex-dividend date.

This happens because the stock is fundamentally worth less without the next dividend payment attached.

Many companies offer dividend reinvestment plans (DRPs).

DRPs allow investors to instruct the company to use their dividends to buy more shares on their behalf, instead of paying cash.

After lodging your DRP form, this process becomes automatic.

It's an easy, passive way for investors increase their shareholdings in a company over time.

And every now and then, a company will offer a discount to shareholders participating in the DRP.

Bonus!

ASX shares with ex-dividend dates next week

The post 14 ASX shares about to go ex-dividend appeared first on The Motley Fool Australia.

But, given how share prices have drifted lower this year, I'm seeing a great opportunity for investors to grab ASX shares while dividend yields are higher.

Don't forget, we saw a few years ago how some businesses were able to accelerate their revenue growth amid the inflationary period – they were not just helpless bystanders in the situation.

Why do interest rates matter for ASX shares?

Interest rates play an important role in how much investors are willing to pay for an asset. It acts like gravity – when interest rates go lower, asset prices can jump higher. But, the opposite is typically true when interest rates go up – it's a significant headwind for asset valuations.

But, share prices can still go up in a rising rate environment if the operating profit/net profit of the business or asset increases. The multiple of earnings that investors are willing to pay is just one part of the equation.

Warren Buffett, the legendary American investor from Omaha, once explained why interest rates are so important for valuations. Buffett said:

The value of every business, the value of a farm, the value of an apartment house, the value of any economic asset, is 100% sensitive to interest rates because all you are doing in investing is transferring some money to somebody now in exchange for what you expect the stream of money to be, to come in over a period of time, and the higher interest rates are the less that present value is going to be. So every business by its nature…its intrinsic valuation is 100% sensitive to interest rates.

Investor expectations of rate rises this year has led to lower share prices for some businesses, along with the oil price volatility.

How does it affect the passive income?

When the share price of an ASX dividend share falls, it can lead to a double whammy of a better valuation and a better dividend yield.

A dividend yield is determined by the size of the payout and the valuation of the business. When share prices go lower, the dividend yield increases.

For example, if a business had a dividend yield of 5% and the share price falls 10%, the dividend yield becomes 5.5%. If it fell 20%, the dividend yield would be 6%.

I like investing at times like these, as it really boosts the potential dividend yield.

Is it a once-in-a-decade opportunity to buy passive income shares? The 2020s have already seen COVID-19, the inflation and tariff related sell-offs, so the declines have been more than once-in-a-decade.

But, this is certainly a rare opportunity to buy ASX dividend shares with a good dividend yield.

What I'd invest in

There are a wide range of ASX dividend shares that are trading at attractive prices with a good dividend yield.

I'm thinking names like Charter Hall Long WALE REIT (ASX: CLW), Centuria Industrial REIT (ASX: CIP), Medibank Private Ltd (ASX: MPL), Telstra Group Ltd (ASX: TLS), Wesfarmers Ltd (ASX: WES), Coles Group Ltd (ASX: COL), Australian Foundation Investment Co Ltd (ASX: AFI), WCM Global Growth Ltd (ASX: WQG), JB Hi-Fi Ltd (ASX: JBH), Universal Store Holdings Ltd (ASX: UNI), Nick Scali Ltd (ASX: NCK) and Lovisa Holdings Ltd (ASX: LOV).

I'm optimistic that the above names can provide investors with a diversified and growing source of passive income over time.

The post A once-in-a-decade chance to earn a supersized passive income from ASX shares? appeared first on The Motley Fool Australia.

I think the stock market is the best hunting zone to find names that can pay a good dividend yield, deliver capital growth and organically raise the passive income. Other non-share investments just don't seem as appealing on that side of things.

If I'm investing for passive income, which I regularly do, I want to focus on investments that can give me a high level of confidence that they're going increase the payout annually for the foreseeable future.

I really like the three ASX dividend shares below for dividends and potential capital growth. Let's dive into why I'd happily spread $10,000 across them.

MFF Capital Investments Ltd (ASX: MFF)

MFF Capital is mostly a listed investment company (LIC), but also has a new funds management segment called Montaka.

The main way MFF makes profit for shareholders is by holding a portfolio of high-quality global shares that are expected to compound earnings in the coming years. By just investing in the best businesses in the world, it has produced solid returns which have helped it fund growing dividends to MFF shareholders.

It also recently acquired Montaka to give MFF access to more investment ideas and research, while also unlocking another earnings growth avenue. A rise in the fund size of Montaka Global Fund – Active ETF (ASX: MOGL) and Montaka Global Extension Fund – Complex ETF (ASX: MKAX) helps generate management fee earnings for MFF.

MFF has guided it's going to pay an annual dividend per share of 21 cents in FY26, which translates into a grossed-up dividend yield of 6.1%, including franking credits, at the time of writing. That means the ASX dividend share is expecting to increase its FY26 dividend by more than 20% year-over-year.

WCM Global Growth Ltd (ASX: WQG)

WCM Global is another LIC with an impressive record of portfolio performance and dividend growth.

The investment team at WCM – based in California's Laguna Beach – aim to look for businesses with an expanding economic moat/improving competitive advantages. The LIC also wants to find businesses that have a corporate culture that fosters the improvement of that economic moat.

Its portfolio mix of US shares and international shares provides investors with diversified holdings, along with compelling potential to deliver returns.

By investing in those high-quality names, WCM Global Growth has managed to outperform the global share market return, whilst paying a rising dividend over the last several years.

The ASX dividend share expects to pay an annual dividend in FY26 that equates to a grossed-up dividend yield of 6.7%, including franking credits, at the time of writing.

Washington H. Soul Pattinson and Co Ltd (ASX: SOL)

I couldn't write this article without mentioning the leader of dividend growth on the ASX, Soul Patts.

It's an investment conglomerate that has already been listed on the ASX for more than 120 years and it hasn't missed paying a dividend in all of that time. Additionally, the business has increased its regular annual payout every year since 1998, which is an incredible record for an ASX dividend share.

The business has built an impressive and largely uncorrelated portfolio across a variety of defensive sectors that can provide cash flow for the business in most economic conditions, giving resilient funding for the growing dividend. The ASX dividend share regularly invests to expand its portfolio and boost its long-term growth potential. I'm forecasting that Soul Patts could pay an annual dividend per share in FY26 that at least translates into a grossed-up dividend of 4.2% (if not more), including franking credits, at the time of writing.

The post Where I'd invest $10,000 into ASX dividend shares right now appeared first on The Motley Fool Australia.

The business is a listed investment company (LIC) that gives investors exposure to a high-quality portfolio of international shares and an impressive record of regular dividend growth.

LICs generate their (accounting) profits by making investment returns, so the strategy and level of performance are essential for paying large and growing dividends.

So, we'll start by looking at why WCM Global Growth invests and then look at the dividend potential of the business to make $2,000 of annual passive income.

Impressive investment performance

There are two main elements that the fund manager looks for.

First, it wants to invest in businesses with good economic moats, or durable competitive advantages. It's focused on the moat trajectory – is it structurally improving – rather than the size of the moat. WCM also uses a forward-looking competitive assessment as part of its process.

Second, the culture of the business is important as a source of advantage. WCM looks at factors like "leadership, alignment, adaptability" and how that can drive long-term value creation.

But, as you'd expect, there are a few other elements of the investment process.

WCM wants to find businesses benefiting from tailwinds with long-term secular trends that can help deliver compounding growth. Preferably, there's a global structural demand supporting earnings.

The ASX stock has a high-conviction portfolio, meaning it's concentrated in just WCM's best ideas, not hundreds of names that could mean being too diversified.

On the valuation side of things, WCM looks for businesses offering great growth at fair prices, while maintaining a "downside protection focus" and an "active risk management". This has helped its portfolio to decline less than the global share market when there are falls.

At 31 January 2026, its portfolio had delivered an average net return of 16% per year since inception in June 2017, outperforming the global share market by an average of 2.7% per year. The returns have been very good and helped fund a pleasing dividend, though that's not guaranteed every year or over the long-term.

Excellent ASX dividend stock credentials

The business has increased its half-year dividend every year since FY19, which is when it first started paying a dividend. In the last few years, it switched to paying quarterly dividends, which is helpful for shareholder cash flow.

WCM Global Growth expects to continue increasing its quarterly dividend every quarter until at least the March 2027 dividend. The business aims to continue increasing its quarterly payout to "enhance shareholder value".

Annualising the expected FY27 second quarter dividend of 2.45 cents per share means a grossed-up dividend yield of 7.4% (at the time of writing) is within sight and I'm expecting further dividend increases during FY27 (and beyond).

To reach an annual passive income of $2,000 (excluding the franking credits) from the ASX stock, we're talking about owning 20,409 WCM Global shares at the time of writing.

I think it's one of the leading ideas to look at for dividends, among others.

The post I'd buy 20,409 shares of this ASX stock to aim for $2,000 of annual passive income appeared first on The Motley Fool Australia.

Dividend growth is not guaranteed of course, but when a business provides guidance of a growing payout, then it's more likely to come true. Plus, the two businesses discussed below have compelling tailwinds for future growth.

I normally mention a name like Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) in an article like this, but I want to highlight two others to build a second income.

Centuria Industrial REIT (ASX: CIP)

This real estate investment trust (REIT) owns a portfolio of high-quality industrial properties across Australia and it's seeing strong rental growth.

In the first half of FY26, it reported strong like-for-like net operating income (NOI) growth of 5.1%, with portfolio occupancy increasing to 95.7% .

Around 60% of leases expiring over the next three years are under-rented, according to the business, providing an opportunity to execute positive rent reversions. The reversions could be boosted in the medium-term thanks to additional market rental growth with a supply-demand imbalance.

The REIT's management points to a number of tailwinds for the industrial property sector including population growth, sustained public infrastructure and a rebound in tenant activity.

On top of that, "national long-term supply remains constrained, driving the increased portfolio occupancy and reinforcing resilient demand for the style of industrial assets" that the REIT owns in "urban infall markets".

The ASX share is also benefiting from strong demand for data centres. It has made recent acquisitions and development initiatives in this space, including the lodged development application for a new 40MW data centre.

The business is expecting to grow its annual distribution by 3% in FY26, translating into a forward distribution yield of 5.2%, which is a great yield for Aussies building a second income.

WCM Global Growth Ltd (ASX: WQG)

One of the best benefits of listed investment companies (LICs) is that they can decide on the level of passive income payment they want to send to shareholders, assuming they have the profit reserve to do so.

WCM Global Growth is one of those LICs that has demonstrated an ability to deliver rising dividends as well as strong portfolio performance.

The ASX share aims to own a portfolio of international shares which have improving economic moats (competitive advantages) and have corporate cultures that foster those competitive advantages.

WCM Global Growth's portfolio has performed well using this strategy, with an average return per year of 25.5% over the last three years. The strategy has delivered an average return per year of 14.6% since March 2008. Of course, it's not guaranteed to perform that strongly in future years.

The business announced that it expects to grow its payout for the quarter ending 30 September 2026 by 14.8%, implying a potential annualised grossed-up dividend yield of 7%, including franking credits, at the time of writing.

I think this ASX share could be one of the most compelling to own over the long-term for building a second income.

The post Want to build up a second income? These 2 ASX shares are a buy appeared first on The Motley Fool Australia.

I've been a fan of the exchange-traded fund (ETF) version of the strategy for a while, and I think the listed investment company (LIC) has a compelling future for passive income too.

A LIC's job is to invest in other assets and hopefully generate investment returns for shareholders, which translates into accounting profits that can be turned into dividend payments.

WCM is a fund manager headquartered in Laguna Beach, California. It is deliberately far away from Wall Street in New York.

The WCM Global Growth is a strong pick for retirees because of how it generates returns and the dividend payments it's providing.

High-quality international shares

The ASX dividend share targets a global portfolio of shares, giving Aussies diversification and access to shares that we would not otherwise have exposure to. That's particularly true if a retiree's portfolio is extremely focused on Australian assets.

In terms of the stock-picking strategy, the investment team at WCM believes that the direction of a company's competitive advantage is far more important for driving shareholder returns than its size.

In other words, WCM is looking to invest in companies that are getting better over time. To identify the moat trajectory, the fund manager uses a "forward-looking lens focused on incremental change, as opposed to a backward-looking lens focused on static criteria."

Another key element for WCM, which the team thinks is a hidden advantage, is the culture of a business. WCM explains:

We believe culture is the most understudied and underappreciated facet of investing. Culture is a set of norms that shape behaviour, rather than simply values on the wall. We employ a team of dedicated culture research analysts who work in tandem with academics and practitioners.

We have developed a robust framework to evaluate cultures, with a process centred around a proprietary set of questions, increasingly complemented by quantitative data.

There are approximately 20 to 40 stocks in the portfolio, which typically come from sectors like consumer, technology, and healthcare.

Impressively, the LIC's portfolio has delivered an average net return per year of 16.5% since inception in June 2017. I'm not forecasting the return to be as strong over the next decade, but I'm optimistic about the outlook.  

The ASX dividend share's appeal for passive income

The business has steadily increased its annual dividend per share since FY19, indicating seven years of regular dividend growth for shareholders.

In FY23, the ASX dividend share shifted to paying dividends quarterly to shareholders, giving investors (including retirees) more regular passive income.

The company has guided that it will steadily increase its quarterly dividend in 2026. The guided payouts expected in 2026 amount to 9.01 cents per share.

If the business does pay that, it translates into a forward grossed-up dividend yield of 6.9%, including franking credits, at the time of writing. The share price is trading at a decent discount to the latest weekly net tangible assets (NTA).

The post Why this ASX dividend share's a retiree's dream appeared first on The Motley Fool Australia.

We work a certain number of hours each week and there's an upper limit on that. But, there are other ways to bring money into our bank account. Passive income can come in a variety of sources such as interest, rental income, distributions and dividends.

The companies behind ASX shares are doing their best to make and grow profit each year, which can lead to a pleasing dividend yield and growing payouts.

The great thing about investing in growing businesses is that they are delivering growth for us, which is much more attractive than holding cash in the bank.

I'll demonstrate how investing in ASX shares can create a second income of $10,000 (and more), even if starting from zero.

Investing regularly can deliver a significant nest egg

To start generating a second income from dividends, investing needs to happen. It takes money to make money.

Everyone's finances will look different, but let's say it's possible that someone/a household can save $1,000 per month, however that happens, to put towards ASX shares. Over the long-term, shares have returned an average of 10% per year and I'm hopeful that stocks can deliver that level of return into the future.

Using the Moneysmart compound interest calculator, investing $1,000 per month can turn into $73,000 after five years and $191,000 after ten years. If the portfolio had a dividend yield of around 5.2%, that would generate $10,000 of annual passive income. A lower dividend yield would require a larger portfolio balance, to reach $10,000 of annual passive income, though that could be the better choice.

Of course, that 10% overall return assumes the dividends are re-invested, so if someone wants to make $10,000 as a second income, I'd suggest investing the dividends into buying new shares until reaching the intended portfolio goal. Spending the dividends along the journey could mean it takes longer to reach (for example) $191,000.

Which ASX shares should investors buy for a second income?

It's rare to find an investment that can deliver a good mixture of both a solid dividend yield and good growth.

One of the most common investments for investors who are searching for yield and capital growth is the Vanguard Australian Shares Index ETF (ASX: VAS) which allows us to essentially invest in the Australian share market. Many large Australian businesses are known for pleasing dividend yields. But, I'm not expecting a lot of capital growth in the medium-term from this fund.

Listed investment companies (LICs) that invest in global shares could offer an appealing mix of growth and dividends because they're able to pay out some of the investment gains as dividends. Names like MFF Capital Investments Ltd (ASX: MFF) and WCM Global Growth Ltd (ASX: WQG) are two names worthy of attention with their impressive investment strategies, solid dividend yields and ongoing dividend increases.

In terms of individual S&P/ASX 200 Index (ASX: XJO) shares that could work well, there are two names that spring to mind: investment house Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) and Bunnings and Kmart owner Wesfarmers Ltd (ASX: WES).

I'm optimistic that the names I've mentioned, along with some others, can be solid long-term investments, unlock a second income and invest for the long-term.

The post Here's how to target a $10,000 second income starting from zero appeared first on The Motley Fool Australia.

But how can we create that cash flow of investment income? Buying a property can require tens of thousands of dollars. It could take a long time to save that much.

The great thing about investing in ASX shares is that we don't need to save a ton to be able to start investing. In fact, some brokers allow us to start investing with as little as $500.

I wouldn't necessarily try to find something that has the biggest dividend yield around because those sorts of businesses don't typically have a reputation for long-term stability or continuous growth. There are lower-risk investments we can buy to start making ASX passive income for our portfolios.

Individual ASX shares

Australian companies are some of the most appealing businesses for dividends because of both the franking credits and the generous dividend payout ratios (to distribute those franking credits for shareholders).

I'd only want to invest in businesses that have a compelling long-term future, where earnings growth seems likely and that can assist dividend growth.

I'm thinking of businesses such as investment conglomerate Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), property owner Centuria Industrial REIT (ASX: CIP), water entitlement owner Duxton Water Ltd (ASX: D2O), telco Telstra Group Ltd (ASX: TLS), funds management business GQG Partners Inc (ASX: GQG) and Kmart and Bunnings owner Wesfarmers Ltd (ASX: WES).

I think there's a very good chance of the above businesses growing their annual payouts regularly in the coming years.

Exchange-traded funds

Exchange-traded funds (ETFs) can be effective options for ASX passive income because of how they enable investors to buy a portfolio of businesses in just a single investment, which is a great tool for diversification.

If investors want a portfolio of large ASX shares then there are a couple of options. There's one that let Aussies invest in dozens of high-yielding ASX businesses – Vanguard Australian Shares High Yield ETF (ASX: VHY).

The Vanguard Australian Shares Index ETF (ASX: VAS) allows Aussies to invest in the S&P/ASX 300 Index (ASX: XKO), which includes those higher-yielding names too, such as Rio Tinto Ltd (ASX: RIO), National Australia Bank Ltd (ASX: NAB) and Westpac Banking Corp (ASX: WBC). The VAS ETF also owns businesses better suited for capital growth.

There are other ETFs that can also provide a good dividend yield level, including Betashares FTSE 100 ETF (ASX: F100) and Betashares India Quality ETF (ASX: IIND), which provide exposure to the UK and India share markets, respectively.

Listed investment companies

One area of the share market that shouldn't be discounted for ASX passive income are listed investment companies (LICs), which enable us to invest in a company whose activity is making investments rather than selling products or services.

Part of the appeal of LICs is that they can utilise the profits of investment performance to pay a steady flow of dividends to investors.

The oldest and largest LIC – Australian Foundation Investment Co Ltd (ASX: AFI) – has been very consistent with its dividends this century.

Other LICs which appeal based on their dividend records include WAM Microcap Ltd (ASX: WMI), WCM Global Growth Ltd (ASX: WQG) and L1 Long Short Fund Ltd (ASX: LSF).

The post How to start generating ASX passive income with as little as $500 appeared first on The Motley Fool Australia.

What has Macquarie done?

The investment bank announced that Macquarie Asset Management (MAM) has reached an agreement to acquire a majority stake in Southern Water Services in the UK.

The Southern Water Services plan

Macquarie outlined that this business provides water services to 2.6 million and wastewater services to 4.7 million customers in Kent, Sussex, Hampshire and the Isle of Wight.

MAM will invest, on behalf of its long-term investors including pension funds and insurance companies, over £1 billion in new equity (almost $2 billion) to recapitalise the business and implement a more sustainable financing strategy for Southern Water.

This money will allow Southern Water to invest "significantly" to upgrade its network. Over the next four years of the current regulatory period, Southern Water will invest £2 billion to fix pipes, pump stations and sewers. These infrastructure items are reportedly "underperforming" and are causing harm to the local environment.

MAM outlined the size of the investment, saying it equated to £1,000 for each property in Southern Water's catchment area. The capital will allow the business to improve its operational performance for stakeholders and increase the financial performance and resilience for shareholders.

Macquarie makes commitments

MAM has had long discussions with Ofwat, which is the regulator of water and wastewater services in England and Wales.

The investment bank noted that Southern Water has one of the worst track records in the UK water sector. It aims to reduce pollution incidents by more than 50% over the next four years. It is committed to significantly improving Southern Water's environmental track record with a zero-tolerance mindset.

Another part of the plan is to reduce leaks through the significant investment programme.

The next commitment was ensuring affordable customer bills. The commitment was that, in total, average water and wastewater customer bills don't rise by more than inflation. That's in addition to honouring an existing £123 million customer rebate due to historical incidents.

Finally, Southern Water wants to offer better customer service by fixing the issues that customers are complaining about, and increasing the capacity to handle complaints.

Macquarie commentary

Leigh Harrison, the boss of Macquarie Infrastructure and Real Assets, said:

Southern Water needs significant investment to improve its operational and environmental performance, and financial health. Without it, the business will be unable to fulfil the expectations of the millions of customers that rely on its services each day or reduce its negative impact on the local environment.

This major £1 billion equity investment by one of our long-term infrastructure funds will help put Southern Water back on a stable footing and enable an ambitious multi-year transformation plan to make essential water and wastewater services in the South East of England more sustainable and resilient.

While we expect Southern Water will have made substantial progress in addressing its issues by the end of 2025, we acknowledge the business' transformation will take time and that is why we intend to own our stake in Southern Water over multiple regulatory periods.

Macquarie share price snapshot

Whilst Macquarie shares haven't done much today, it's up 8% over the last six months and up more than 25% in the last year.

The post Macquarie (ASX:MQG) share price struggles following $2b UK investment news appeared first on The Motley Fool Australia.

Some of wealth-building is down to luck. But a lot of it is down to the process you use for your money and the systems you put in place.

I think these important rules are worth following to help you build wealth:

Spend less than you earn

I think one of the most important rules for building wealth is making sure that you spend less than you earn, that you live within your means.

It's easy to spend a lot of money. It's harder to earn more. The trick is to make sure that your spending isn't consistently more than your income. If you earn $100 a month more than you spend then you can build your wealth over time. If you always spend $100 a month more than you earn then your net worth is going to head downwards until interest and debt overwhelm you.

How are you supposed to know if you're spending less than you earn? By tracking of course! I'm sure whichever bank you're with would offer some personal finance tools whether it's Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), Australia and New Zealand Banking Group (ASX: ANZ) and National Australia Bank Ltd (ASX: NAB) or another one.

Plenty of people use another tool to track their finances like Excel, Google Sheets or even Zip Co Ltd's (ASX: Z1P) Pocketbook. I use Excel. 

Budgeting can be a really powerful tool to help you save money.

Be intentional with your savings

Spending less than you earn is a good outcome of your hard work and financial choices. But I think it's important to come up with an intentional system for your money.

Some people like the idea of saving money first and spending what's left after that. If you're aiming for a long-term savings goal, such as a house deposit, you need to make sure you're actually putting that money aside into a savings account rather spending it.

Even if you just save $100 or $200 a month, it's important to classify money not spent that month as savings. Keeping it physically separate in a savings account is a good idea. Otherwise you could just end up spending it a month or two later.

You can really start building good savings habits if you just make it into a routine to save money (like a fitness routine). As Warren Buffett said: "Chains of habit are too light to be felt until they are too heavy to be broken."

Have an investment plan

No-one has a crystal ball to be able to tell you when share prices are going to fall or rise. It's impossible to predict. A year ago I don't think anyone would have seriously predicted that a global pandemic was about to happen.

I think it's important to regularly invest into your portfolio. It doesn't matter whether the market is up or down. It doesn't matter which side of politics is in power. Don't worry much about the latest GDP or house price statistics. Investing regularly will make sure your wealth-building plan stays on track. It could be once a month, once every two months or even once a quarter. Just commit to regularly investing.

What shares would make good regular investments? I think some exchange-traded funds (ETFs) would be good ideas like Betashares Global Quality Leaders ETF (ASX: QLTY), BetaShares Global Sustainability Leaders ETF (ASX: ETHI) or Vanguard Msci Index International Shares Etf (ASX: VGS).

I also think that listed investment companies (LICs) and trusts (LITs) can be good for regular investing. I like ideas such as MFF Capital Investments Ltd (ASX: MFF), Magellan Global Trust (ASX: MGG), WCM Global Growth Ltd (ASX: WQG) and Future Generation Global Invstmnt Co Ltd (ASX: FGG).

The post 3 important rules to help you build wealth appeared first on The Motley Fool Australia.

However, the difference between a REIT or ETF and an ASX LIC is the structure of the business. LICs are generally limited companies, while ETFs and REITs are explicitly trusts. There are a range of differences but for me the most important is that a LIC is like any other company. Therefore, you buy shares not units. Meaning, you buy a part of the company rather than a unit in the underlying assets.

Hearts and Minds Investments Ltd (ASX: HM1)

Hearts and Minds is a great ASX LIC which listed during 2019. The fund managers forgo all fees, instead donating to leading Australian medical institutes. It has a concentrated portfolio in 25-35 Australian and global securities. These are based on the highest conviction ideas from leading fund managers.

In year to date trading, Hearts and Minds is up by 6.71% despite the coronavirus market crash in March. The company achieved a growth of 7.2%, compared to 3.4% in the MSCI World Net Total Return Index (AUD).

This LIC is currently trading at less than its net tangible assets (NTA) value per share of $3.71.

Ophir High Conviction Fund (ASX: OPH)

The Ophir High Conviction fund provides shareholders with a concentrated fund on companies outside of the S&P/ASX 50 Index (ASX: XFL). The company's investment philosophy is very fundamental. That is, a bottom up approach to identify under-valued ASX shares. Particularly those with existing and proven business models and large, or growing, addressable markets.

What originally attracted me to this ASX LIC is that both founders have all of their liquid investments here. In year to date trading, this ASX LIC's share price is up by 21.69%. It is trading at a price to earnings ratio (P/E) of 11.08, and at a slight premium to its NTA per share of $2.98.

The Ophir LIC portfolio uses the S&P/ASX Mid Small Index (ASX: AXMSA) as a benchmark. In FY20 the LIC delivered a growth rate of 12.7% against a benchmark growth rate of -5.3%.

WCM Global Growth Ltd (ASX: WQG)

WCM Global is a $200 million ASX LIC with an estimated NTA per share of $1.48 at the time of writing. This LIC also focuses on fundamental company analysis. However, it places a lot of value in the organisation's moat, or competitive advantages. In FY20, the LIC delivered a return of 17.6% for the year. Outperforming its benchmark MCSI All-Country World ex Australia Index by 12.9%.

This ASX LIC provides access to a range of giant global technology companies. For instance, it includes companies like Shopify Inc (NYSE:SHOP), Tencent Holdings Ltd (HKG: 0700), and Mercadolibre Inc (NYSE:MELI). At close of trading on Wednesday, this ASX LIC is selling for a P/E of 9.32.

The post 3 ASX LICs that are destroying the benchmark appeared first on The Motley Fool Australia.

There's not much point going for a business that doesn't have much revenue growth potential in my opinion unless you're focused on dividends. Owning mediocre businesses would probably lead to mediocre returns. Going for income may be a poisoned chalice if the share price declines over time.

I believe profit growth is important. The share price of a business is linked to its earnings. If the earnings aren't going anywhere then the share price may not go anywhere either.

Scalable businesses are really attractive to me because it means they make more profit from revenue growth than they did before. It's the profit growth that ultimately helps increase the share price and dividends. Finding a business that can generate very strong profit growth is good for potential shareholder returns.

Pushpay Holdings Ltd (ASX: PPH)

Pushpay is one of my top ASX share ideas right now. It's probably my highest-conviction idea. It helps not-for-profits like US churches receive electronic donations. It also provides livestreaming options for clients to connect with their congregations. It's very useful in this new COVID-19 world. 

When you can find a great business at a really good price I think you just have to jump on that opportunity.

At the current Pushpay share price it's priced at 36x FY21's estimated earnings. I don't think that's unreasonable at all considering its growth and how low official interest rates have gone in Australia and New Zealand.

FY20 was an incredible year for Pushpay. It acquired Church Community Builder which really increased the capabilities of Pushpay with the personnel, the access to new clients for both businesses and the ability to offer a combined service. The combined business will hopefully be able to generate more revenue per client.

Pushpay revealed strong revenue growth in FY20 with an increase of 32% to US$129.8 million. In FY21 the ASX tech share is expecting to at least double its earnings before interest, tax, depreciation, amortisation and foreign currency (EBITDAF).

The ASX share impressed me most in FY20 with how much its profit margins increased. In FY21 its gross profit margin increased from 60% to 65% and its EBITDAF margin improved from 17% to 22%. The company is aiming for US$1 billion revenue in the coming years, so its margins could go much higher. 

WCM Global Growth Ltd (ASX: WQG)

This ASX share is a listed investment company (LIC) that likes to find businesses with rising competitive advantages and a corporate culture that supports that goal.

A positive moat trajectory for businesses suggests that the companies are getting even stronger, which should lead to good shareholder returns. WCM measures this with a rising return on invested capital (ROIC) as opposed to those with a large but static or declining moat.

In the past it owned shares like Facebook, Apple, Amazon, Netflix and Alphabet, but it has moved on to other opportunities which are seeing regular improvement.

At the end of August 2020, the ASX share's biggest 10 positions were: Shopify, West Pharmaceuticals, MercadoLibre, Visa, Stryker, Taiwan Semiconductor, Tencent, Lululemon Athletica, Thermo Fisher Scientific and Ansys.

As you can see, there's a large allocation to IT and healthcare businesses. This offers secular growth for investors. It's also invested in plenty of businesses that aren't focused on just the US.

I believe that WCM offers attractive diversification that you can't really get with ASX shares nor from the most popular exchange-traded funds (ETFs).

It has done very well. Over the past three years its portfolio return (after management fees but before expenses) has been 22% per annum. There's no guarantee of future performance, but it shows how good WCM is at picking businesses. 

At the current WCM share price it's trading at a discount of 10% to the net tangible assets (NTA) at 18 September 2020.

Foolish takeaway

I really like both of these ASX shares and I think they could strongly outperform many other ASX shares over the next three to five years. I believe Pushpay could be the best one to buy for growth, but I like the international diversified growth offered by WCM.

The post 2 top ASX shares I'd buy with $2,000 right now appeared first on The Motley Fool Australia.

I can't say that about many ASX shares right now. COVID-19 is still causing a lot of uncertainty on the share market. The valuations of some businesses like Afterpay Ltd (ASX: APT) have gone through the roof due to good growth and even higher expectations of the future.

Government assistance for the Australian economy will continue with lower jobkeeper payments, but COVID-19 impacts are still hard to predict with the situation constantly evolving.

Regardless of what happens next with COVID-19, I'd be happy to buy these two ASX shares in a heartbeat:

WCM Global Growth Ltd (ASX: WQG)

WCM Global Growth is a listed investment company (LIC) which invests in global shares and excludes ASX shares.

The portfolio is run by WCM Investment Management, a Californian based manager with a focus on high growth businesses in the consumer, technology and healthcare sectors.

A key focus for the LIC is to look for businesses with a growing economic moat. One of the main measures of this is an improving return on invested capital (ROIC). It wants to be invested in business that are strengthening their market positions, rather than businesses that are mature or declining. It's the 'direction' of the moat that is the most important thing to WCM.

The LIC also looks at the management and culture of the business to ensure that they are focused on a positive moat trajectory.

Some of its current big positions include: Shopify, West Pharmaceuticals, MercadoLibre, Visa, Stryker, Tencent, Lululemon Athletica, Taiwan Semiconductor, Crown Castle International and Ecolab.

The ASX share invests with a long-term holding period in mind. The investment approach has led to very strong returns. Over the past three years its portfolio has returned 20.15% per annum after fees, outperforming its global benchmark by 9.4% per annum. I'm not sure the next three years will be as strong as that, but I think the good performance can continue with how it invests.

At the current WCM Global growth share price of $1.26 it's trading at discount of nearly 16% to the pre-tax net tangible assets per share at 24 July 2020. That's a nice discount for a strong performer in my opinion. I'd be happy to buy shares today. 

Bubs Australia Ltd (ASX: BUB)

The Bubs share price has dropped by 11% since giving its June 2020 update to the market.

I was a bit unfortunate with the timing of my recent bullish assessment of Bubs but the ASX share looks even better value to me now.

I think it's a good idea to know businesses well enough that you'd be confident to buy (more) shares when the share price drops. That's the case for me with Bubs – I'd be happy to buy shares at this lower price.

The infant formula business has an exciting future in my opinion. In the FY20 update, the ASX share said that it grew its revenue by 32% to $62 million. Infant formula revenue increased by 69% during the year. It's the infant formula segment that I'm particularly interested in because it has a gross profit margin of around 40%, which is much higher than the overall business. As infant formula becomes a larger percentage of total sales, Bubs' margins will naturally improve – and that's before the benefit of economies of scale kicks in.

Management are expecting another strong year of growth in FY21. It's expecting to achieve profitability at the 'normalised earnings before interest, tax, depreciation and amortisation (EBITDA)' level.

The recent announcement of the launch of Vita Bubs – a vitamin and mineral supplement range – should help boost longer-term revenue as it can satisfy more of the consumer's daily nutritional and dietary needs. Hopefully having Jennifer Hawkins as the global ambassador will also help the company's long-term growth.

I think investors are underestimating how much the company can grow over the long-term. Even if the short-term wasn't as good as some hoped.

The post 2 ASX shares I'd buy in a heartbeat appeared first on The Motley Fool Australia.

We have to decide if the price being presented is good value or not. We can decide to buy shares at the price the market is offering. Perhaps we may take the price the market is willing to buy our shares for. Or we can just do nothing.

I don't think there are many shares that are trading at great value at the moment due to uncertainty caused by COVID-19 (and the related impacts) as well as the strength of the share market's recovery since March 2020.

But there are still some ASX shares I'd be happy to buy for my portfolio today:

Bubs Australia Ltd (ASX: BUB) – $3,500

Bubs is a business which is still fairly early on in its growth journey. It's an infant formula business with a specialisation in goat milk products.

With a smaller business I think it's important to think about the long-term. Don't think about how much an ASX share may grow in six months. Think about where the business will be in three years or five years from now.

Bubs is doing an excellent job of growing its international revenue. In the quarter ending 31 March 2020 it more than doubled its Chinese revenue. Its 'other markets' revenue increased by about 20 times in that same quarter. I think the company has great global growth potential. There is a huge addressable market in Asia alone.

The Bubs share price looks good value to me. Due to the essential nature of the business' products, I think Bubs has defensive revenue with a great growth trajectory.

WCM Global Growth Ltd (ASX: WQG) – $2,500

This is a listed investment company (LIC) that targets global businesses. It looks for international businesses that have an expanding economic moat. One of the main factors that WCM looks for is a rising return on invested capital. It also looks for businesses with a corporate culture that supports that goal of an improving economic moat.

Some of the ASX share's current largest positions include Shopify, Tencent, Visa and MercadoLibre. These businesses are leaders in their respective markets.

The LIC's returns have been strong over the past three years, yet the WCM Global Growth share price is still trading at a double digit discount to the pre-tax to the latest net tangible asset (NTA) disclosed in the weekly update.

City Chic Collective Ltd (ASX: CCX) – $1,000

City Chic is one of the most promising ASX retail shares in my opinion. The ASX share is a fashion leader in Australia for plus-size clothing for women.

City Chic was growing nicely before COVID-19 came along. Whilst store closures were tough, the company saw online sales growth of 57% during the shut store period. That's impressive considering the company said two thirds of global sales are online.

I'm excited by City Chic's aim of becoming a world leader in plus size women's clothing. It's making smart acquisitions to try to make this happen.

At 21x FY22's estimated earnings I think the City Chic share price looks like a good long-term buy.

Vitalharvest Freehold Trust (ASX: VTH) – $2,000

There is a lot of uncertainty in the share market and economy at the moment. A cheap agricultural real estate investment trust (REIT) could be a good way to play this situation.

Farming returns can be quite different to the overall share market. Vitalharvest owns some of the largest berry and citrus farms in Australia. Those farms are leased to Costa Group Holdings Ltd (ASX: CGC). Hopefully the next 12 months will be better for Costa's earnings because Vitalharvest has a profit share agreement with the horticultural giant.

I'm excited that Vitalharvest has a new manager which will be looking across the whole farming supply chain for investment opportunities. Things like food storage and food processing properties will be among the considerations for the ASX share's portfolio.

At the current Vitalharvest share price it's trading at an approximate 20% discount to the net asset value (NAV) at 31 December 2019. I think that's a big discount that can close up with better earnings and distributions from the REIT.

Foolish takeaway

I think each of these ASX shares could beat the market over the next three to five years. Vitalharvest looks great value and I believe Bubs has a very good growth journey ahead of it, assuming China doesn't cause any problems with exports.

The post Where I'd invest $9,000 in ASX shares appeared first on The Motley Fool Australia.