20 Monthly Returns Investment Options in Australia

Welcome to our ultimate guide to Australia’s monthly return investment options! We’ve got a range of options from superannuation funds and term deposits to high growth equities, ETFs and cryptocurrencies, all balanced for risk and return.

Real estate options including REITs and syndicates offer steady income, while innovative strategies like venture capital and hedge funds offer transformational growth. Fixed income investments give you monthly returns with lower risk.

This guide will show you how to build a diversified income generating portfolio across industries. Get on the path to financial growth and stability with smart, balanced investing.

Superannuation Funds for Retirement

Superannuation funds are the foundation of retirement planning in Australia, with tax benefits and long term growth. They come in various investment options from conservative to high growth.

Balanced funds, which are often the default for many Australians, return between 0.5% and 2% per month, although this can vary depending on market conditions.

High growth options, which are more equity based, can return 4% per month or lose money in downturns.

Over a 5 year period super funds often return 7% to 10% per annum, making them a stable way to build wealth. Their diversified portfolios have a mix of shares, bonds and cash to reduce risk and provide stability.

Big players like AustralianSuper and Hostplus are consistently among the top performers, with good asset allocation and strong governance.

Legislative changes like increasing the super guarantee rate will increase the long term value of these funds.

But members should monitor fees as high management costs can eat into returns. If you want a tax effective way to get monthly income and build wealth for retirement, superannuation is essential.

Building Wealth with the Australian Stock Market (ASX)

The Australian Stock Market (ASX) is the key to a world of wealth building opportunities, returning 5% to 10% per annum.

With blue chip companies the ASX is for experienced and new investors. Monthly returns can vary greatly, from -2% in downturns to +3% in good times.

The key sectors are mining and financial services. Companies like BHP and Rio Tinto benefit from Australia’s natural resources and global demand for commodities. They offer dividend income and capital growth.

Tech and healthcare sectors with companies like CSL and WiseTech Global add growth to your portfolio.

Factors that affect performance are interest rates, global trade and domestic policy.

Investors often diversify their ASX holdings with exchange traded funds (ETFs) to spread risk and get market exposure. If you’re willing to ride the volatility the ASX offers a great way to get monthly income and long term wealth.

ETFs for Efficient Investing

ETFs offer diversification and cost effectiveness, making them a popular way to get monthly income.

By tracking indices, sectors or asset classes ETFs give you exposure to a wide range of investments without active management.

Monthly returns are between 0.5% and 2% depending on the underlying assets. For example the Vanguard Australian Shares ETF (VAS) tracks the ASX 300 Index and returns are aligned to the broader market.

Similarly the BetaShares A200 ETF focuses on the top 200 companies and is for those who want concentrated exposure to the top Australian shares.

ETFs aren’t just for shares, they cover bonds, commodities and even niche areas like tech or renewable energy. Liquidity and transparency gives investors confidence and low expense ratios mean more net returns. Recent trends show growing interest in ESG ETFs as sustainable investing becomes more popular.

As an investment vehicle ETFs give you both income and portfolio growth.

Steady Income with Real Estate Investment Trusts (REITs)

Real Estate Investment Trusts (REITs) are the foundation for investors who want steady property backed income. These publicly listed vehicles pool money to invest in property portfolios, office spaces, retail properties and industrial parks.

REITs distribute a large portion of the rental income to shareholders as dividends, so you get a monthly income stream.

Returns are 0.4% to 0.8% per month depending on property values and rental yields. Industrial REITs like Goodman Group are resilient in economic downturns and benefit from the e-commerce boom. Retail REITs are rebounding post pandemic and residential REITs are benefitting from consistent housing demand.

Beyond income REITs offer capital growth from property value growth and strategic acquisitions. They also give you exposure to real estate without the headaches of direct property ownership, maintenance or tenant management.

As inflation continues to rise REITs are a hedge, keeping your purchasing power and providing a diversified income stream.

Security and Stability with Fixed Income

Fixed income investments, government and corporate bonds are the epitome of stability and predictability. These debt instruments give you regular interest payments so are perfect for conservative portfolios. Monthly returns are 0.2% to 0.4% regardless of market volatility.

Australian government bonds are considered low risk and are the foundation for many fixed income strategies. Inflation linked bonds add an extra layer of security by adjusting returns for rising prices. Corporate bonds are slightly riskier but offer higher yields especially if issued by strong companies.

Institutional investors and retirees love fixed income for principal protection and income. Returns are lower than equities or alternative investments but the security they provide offsets this trade off. Along with diversification fixed income instruments are a cornerstone for those who want capital preservation and income.

Secure and Steady with Term Deposits

Term deposits are the default choice for risk averse investors who want secure and predictable returns. By locking in funds for a set term, usually 3 months to 5 years, you get fixed interest rates that protect you from market volatility. Current rates are 0.3% per month, that’s 3.5% to 4.5% per annum.

Financial institutions like Commonwealth Bank, Westpac and NAB offer competitive term deposit products, often with specific investment horizons. Special promotions for new deposits sometimes sweeten the deal so are good for those with idle cash. But the trade off for security is liquidity. Funds are locked in until maturity unless you meet early withdrawal conditions (often with penalties).

Despite their simplicity term deposits are losing ground in an inflationary environment and higher yielding alternatives. But they still suit those who prioritise capital safety over growth. Good for emergency funds or bridging short term goals term deposits offer stability and reliability in an otherwise volatile investment landscape.

High Risk High Reward with Cryptocurrencies

Cryptocurrencies have become a high risk high reward investment category and are attracting both seasoned investors and tech enthusiasts. Bitcoin and Ethereum the two largest players in the market have monthly price movements of -15% to +20% so are very volatile. Despite these moves many investors are drawn to their potential for big gains.

Blockchain is the technology behind the crypto ecosystem and promises to revolutionise industries. Regulatory clarity and institutional adoption have recently given it more credibility with companies like Tesla, MicroStrategy and Square adding crypto to their balance sheets.

Decentralised Finance (DeFi) platforms expand earning opportunities with yield farming and staking as passive income streams. You can earn 5% to 10% per annum monthly depending on network activity and token dynamics. But cryptocurrencies are speculative so be cautious. As an emerging asset class it’s for those who can stomach extreme volatility for transformational growth.

High Returns with Private Equity Funds

Private equity funds invest in unlisted companies with strong growth potential and offer investors returns that often beat traditional equities. With average annualised returns of 8% to 12% (or 0.6% to 1% per month) private equity focuses on long term capital growth not short term income.

Investors in private equity commit capital to funds managed by firms like Blackstone, KKR and TPG. These funds use strategies like buyouts, growth equity and venture capital to build diversified portfolios. Successful exits (IPOs, mergers or acquisitions) are the key to returns.

But private equity investments come with their own challenges. They are highly illiquid, 5 to 10 year commitments and often only for institutional or accredited investors. The high risk is offset by thorough due diligence and management. For those with the means and patience private equity gets you access to the bleeding edge of innovation and market disruption.

Sophisticated with Hedge Funds

Hedge funds are sophisticated investment strategies that aim to make money in any market. They use various approaches, from global macro to event driven and equity long short so can play both up and down markets.

Returns vary monthly from -2% to +4% depending on the strategy and market conditions. Hedge funds like Bridgewater Associates and Citadel have a reputation for beating the benchmarks. They use quantitative analysis, arbitrage and proprietary research to have an edge.

High fees (2% management fee and 20% performance fee) are a feature. But hedge funds are attractive to high net worth individuals and institutions looking for risk adjusted returns. Not for everyone but a dynamic option for those with big capital and can stomach complexity.

Funding Innovation with Venture Capital

Venture capital (VC) funds innovation by investing in early stage startups in technology, healthcare and other high growth industries. Returns can be 1.5% to 2% per month but the journey is uncertain and risky.

VC firms like Sequoia Capital and Accel Partners invest in startups before they generate revenue. Companies like Airbnb, Uber and Canva were funded by VC and went on to deliver astronomical returns when they went public or got acquired. But not all startups succeed so diversification of the portfolio is key to managing risk.

VC investments require a long term horizon and big patience. They are illiquid and often locked in for years until exit opportunities arise.

Despite these challenges venture capital gets you access to the bleeding edge of innovation so it’s a magnet for those with high risk tolerance and a love for transformational ideas.

Building Wealth with Direct Real Estate Investment

Investing in direct real estate is a timeless way to build wealth and generate income. By buying residential or commercial properties you get two income streams: rental yields of 0.5% to 1% per month and capital appreciation of 0.3% to 0.7%.

Residential properties in high demand areas like Sydney and Melbourne offer stable rental income from strong housing markets.

Commercial properties (office and retail) offer higher yields but come with more tenant risk. Post pandemic trends have seen a shift to suburban office spaces and mixed use developments.

Initial investments in direct real estate require big upfront costs (property purchase, maintenance, taxes, insurance).

Platforms like REA Group and CoreLogic provide property valuations, rental rates and growth forecasts to help investors make informed decisions. Real estate requires active management but is tangible and can create long term wealth so is a foundation for both new and experienced investors.

Diversified Income with Real Estate Syndicates

Real estate syndicates is a collective way of property investing where participants pool their resources and get access to premium properties.

Returns range from 0.6% to 1% per month consisting of rental income and property appreciation. Syndicates are an option for those who can’t invest directly.

Syndicates focus on high value properties like commercial complexes, industrial parks or large scale residential developments. Investors get shared risk and professional management often done by experienced firms like Charter Hall and Centuria.

These managers take care of tenant acquisition, property maintenance and income distribution making the investment process easier for participants.

However real estate syndicates come with inherent risks tied to property market fluctuations, economic downturns and project specific challenges. And syndicates often require medium to long term commitment so liquidity is limited.

Despite these limitations syndicates is a bridge between direct real estate and REITs offering a balance of accessibility, income potential and diversification.

Steady Returns with Business Loans

Business loans allows investors to earn steady returns by funding small to medium enterprises (SMEs). Platforms like Prospa and Moula facilitate these transactions, connecting lenders to businesses that need capital for expansion, inventory or operational needs.

Returns on business loans range from 0.5% to 1.7% per month depending on the borrower’s credit score and loan terms.

These loans are unsecured so lenders rely heavily on the financial health of the borrowing business. Diversifying across multiple loans reduces the risk of individual defaults. Platforms often have risk assessment tools to help investors evaluate opportunities.

The SME sector in Australia is growing and contributes 57% to the GDP so there’s a big demand for alternative funding sources. Business loans generates income and grows the economy by supporting entrepreneurship.

But investors must weigh the risk of defaults against the high returns so due diligence is a must for this investment.

Unlocking Potential with Peer-to-Peer Lending

Peer-to-peer (P2P) lending makes finance more democratic by allowing individuals to lend directly to borrowers through online platforms like Plenti and SocietyOne. With returns ranging from 0.4% to 1.5% per month P2P lending offers higher returns than traditional savings accounts but with higher risk.

Borrowers on P2P platforms are individuals consolidating debt to small businesses needing working capital. The platforms assess creditworthiness and categorize loans into risk tiers that determines interest rates and default probability. To manage risk investors can spread their capital across multiple loans or opt for auto-investment features.

P2P lending is for those who want passive income but it comes with risks of borrower defaults and platform insolvency. But its growth is a sign of the shift towards decentralized finance and a flexible and accessible investment option for those who can balance risk and reward.

Maximise Returns with Invoice Financing

Invoice financing is a niche but profitable investment. It involves lending money to businesses against their unpaid invoices. A short term funding solution for businesses to manage cash flow and for investors to earn 1-2% per month.

Fundbox and MarketInvoice facilitates these transactions, connecting investors to businesses that need immediate liquidity. Returns comes from the discount applied to the invoices, repayment typically within 30 to 90 days.

This short investment horizon is liquid so invoice financing is a good option for cash conscious investors.

Risk management is key as returns depends on the creditworthiness of the invoiced customers not the borrowing business.

Despite the complexity invoice financing is a high yield alternative to fixed income investments especially for those who want to be exposed to the SME sector.

Invest in Augmented Reality Stocks

Augmented Reality (AR) stocks is a exciting space for tech investors. Companies like Unity Software and Snap Inc. are leading the way, using AR in industries from gaming to construction.

Returns on these investments range from 0.5% to 1.2% per month driven by technology adoption and industry growth.

AR is changing user experiences, global spending on AR/VR is projected to reach $50 billion by 2025. Applications in healthcare, real estate and retail is further proof of its growing importance.

For example AR assisted surgeries and virtual property tours are gaining popularity and expanding the investment opportunities.

Despite the promise AR stocks are volatile and influenced by market sentiment and competition. Investors should take a long term view and focus on companies with strong IP, scalable solutions and strong financials.

As AR changes industries early investments in this space can mean big capital gains.

Sustainable Returns with Renewable Energy Investments

Renewable energy projects is a sustainable and profitable investment option with returns of around 0.6% to 1% per month. Solar farms, wind energy plants and hydropower projects are the main players in this space driven by the increasing global demand for green energy.

First Solar, Vestas and NextEra Energy are the leaders, backed by government incentives and carbon neutral pledges from major economies. Australia with its natural resources is a hot spot for renewable investments.

The country’s Renewable Energy Target (RET) has attracted billions of dollars in funding, large scale solar farms and wind farms are generating steady cash flows for investors.

You can invest in renewable projects directly through infrastructure funds like Macquarie’s Green Investment Group or indirectly through ETFs that focus on clean energy. The sector is resilient to economic cycles and aligned with environmental, social and governance (ESG) goals.

But policy changes, weather variability and high upfront costs need to be considered. For long term investors renewable energy is a powerful combination of stability, growth and sustainability.

Physical Growth with Agribusiness Investments

Agribusiness investments including farmland acquisitions and agricultural funds offers a unique mix of income and asset appreciation.

Returns typically range from 0.4% to 1% per month driven by crop yields, livestock performance and commodity prices.

Australia’s agribusiness sector is world class and contributes significantly to the country’s exports of wheat, beef and wine. Investors can participate through agricultural funds like Rural Funds Group (RFF) or directly by owning and leasing farmland.

Farmland prices have been appreciating steadily driven by increasing global food demand and technological advancements in precision farming.

Risks include weather extremes like droughts or floods and fluctuations in global commodity markets. To mitigate these diversified agribusiness funds often have a mix of crop types, geographic locations and supply chain operations.

For investors looking to get steady returns and exposure to a critical global industry agribusiness is a impactful and physical choice.

Managed Funds: Curation of Investments

Managed funds is a curated approach to investing, delivering returns between 0.3% to 1.5% per month. These funds allocate capital across asset classes like equities, bonds and real estate depending on the fund’s objectives and risk profile.

Fund managers from Vanguard, Fidelity and BlackRock use active or passive strategies to generate returns.

Active funds try to beat the benchmarks through strategic allocation and market timing, passive funds track the indices with lower fees. The choice between them depends on the investor’s goals, active funds tend to perform better in volatile markets.

Recent trends show increasing interest in thematic funds focused on ESG, technology and emerging markets. These funds align financial returns with investor values, for a new generation of purpose driven investing.

But fees and performance variability need to be considered. Managed funds is a versatile tool to build wealth and get professional expertise.

International ETFs: Global Exposure

International ETFs gives you exposure to global markets, so you can diversify beyond your backyard. Returns typically range from 0.5% to 2% per month driven by the underlying indices and exchange rate fluctuations.

Popular options are iShares MSCI World ETF and Vanguard FTSE All-World ETF which tracks equities across developed and emerging markets.

These funds is a cost effective way to get into global growth stories from U.S. technology giants to Asia’s booming consumer sector.

Recent geopolitical and economic events like China’s post pandemic recovery and U.S. Fed’s interest rate decisions impact returns. Currency fluctuations adds another layer of complexity and can either amplify or dampen gains.

For example a falling Australian dollar can boost returns on international holdings when converted back to AUD.

International ETFs is for investors who want broad diversification and growth. By spreading risks across regions and industries they provides a hedge against domestic economic shocks and unlock global opportunities.

Originally Published: https://www.starinvestment.com.au/monthly-returns-investment-australia/