Best High Return on Investment Options for Australian Investors

High return on investment is the goal of every Australian investor but achieving consistent results requires smart strategy and good investment decisions. With the right approach you can beat the 9.35% per annum average of the stock market through diversified investment portfolios.

From growth shares and dividend shares to property investments and alternative assets there are many options for savvy investors. The key is knowing which investment strategies align with your financial goals, risk tolerance and investment timeframe.

This guide reveals proven ways to achieve 12%+ per annum returns while managing market risk. Discover the investment vehicles and strategies used by successful Australian investors to build wealth over time.

Understanding High Return on Investment

Return on investment is how much profit you make relative to your initial investment. The basic ROI formula is: (Gain – Cost) / Cost × 100. For example buying individual shares for $10,000 through your brokerage account and selling for $11,200 is 12% ROI.

Australian shares have returned 9.35% per annum over the last decade on the major stock exchanges. This is our benchmark for comparing different investment options.

Current market averages across different asset classes:

• ASX 200 shares: 9-10% per annum through stock market investments

• Australian property: 6.4% capital growth plus rental yields

• High yield savings accounts: 3-4% from major banks

• Government bonds: 3-5% with lower risk investments profile

• Savings accounts: 1-3% maximum returns

What are High Yield Investment Categories

High ROI definitions vary by investment context and risk profile:

• Stock market investments: 12%+ per annum from growth investments

• Property investments: 10-15% total returns including rental income

• Business investments: 15-20% target through active management

• Alternative investments: 15%+ potential returns with higher risk

Experts predict tough times ahead with the federal reserve and interest rates. So smart investment decisions are more important than ever to achieve high investment returns.

For detailed ROI calculation methods and investment examples, visit Canstar’s return on investment guide which explains how to measure performance and compare investment opportunities.

Top High Return Investment Options

High Return Stock Market Investment Opportunities

Growth Stocks and Technology Investments

Growth stocks have been performing well, with Information Technology up 2024. These growth investments can return 15-25% pa for investors with 5+ year timeframes and higher risk tolerance.

When looking at growth stocks, focus on companies with:

• Strong earnings growth (20%+ pa) and expanding market share

• Innovation in growing sectors with competitive advantage

• Solid balance sheet and experienced management team

• Clear investment objectives aligned with market trends

Popular Australian tech growth stocks include Altium, Xero and WiseTech Global. These companies have delivered strong returns through their managed fund portfolios and direct stock holdings.

For education and insights into technology investing strategies and opportunities, explore Motley Fool Australia’s technology investing guide which provides expert guidance on evaluating and investing in technology companies within the Australian market.

High Yield Dividend Stocks for Income Generation

Dividend investments accounted for around 400bps pa on average for the ASX 200, that’s half the total return. These income focused investments deliver 8-12% pa through regular dividends, perfect for investors looking for steady income streams.

Top ASX dividend stocks are offering yields between 4.5-16.6%, with Helia offering 16.6% and New Hope Corporation 10% through their investment accounts.

Key dividend stocks to consider for your portfolio:

• Commonwealth Bank (CBA): 4-5% yields with strong fundamentals

• BHP Group: Resource sector dividend exposure with global reach

• Telstra: Telecommunications income with consistent payouts

• Wesfarmers: Diversified retail exposure across multiple sectors

Australian dividends come with franking credits which can boost your effective returns significantly.

To learn about dividend investing strategies and yield evaluation techniques, explore Market Index’s dividend yield basics which covers essential concepts for understanding and analyzing dividend stocks in the Australian market.

Real Estate: High Return Investment Properties in Australia

Rental Property Investment Strategies

Home prices in Australia are expected to rise 3.7% in 2025, then 5.0% pa in 2026 and 2027. This long term wealth building strategy can deliver 8-12% pa through rent and capital growth for investors with substantial capital.

Over the last 30 years real estate in Australia has delivered 6.4% pa capital growth, but various costs can impact net returns significantly.

Major investment costs to consider:

• Land tax and council rates impacting ongoing returns

• Insurance premiums (0.2-1% pa) protecting your assets* Maintenance costs (1% of property value per year)

• Property management fees for professional oversight

• Real estate agent commissions (2-3%) when selling

To understand rental yield calculations and property investment fundamentals, check out DPN’s rental yield analysis which offers practical frameworks for evaluating property investment opportunities and optimizing returns in the Australian real estate market.

Real Estate Investment Trusts (REITs)

Australian property ETFs like VAP and SLF give you exposure to corporate bond funds and real estate investment trusts with professional management. This diversified approach can deliver 6-10% pa, perfect for investors wanting property exposure with stock market liquidity.

REITs offer many benefits for your portfolio:

• Regular dividend payments for steady income streams

• Professional property management so you don’t have to get involved

• Diversification across property types and geographic regions

• Easy buying and selling through your standard brokerage account

Popular Australian REITs include Scentre Group (shopping centres), Goodman Group (industrial properties) and Charter Hall Group (office properties).

For in-depth analysis of REIT investing strategies and Australian market opportunities, visit Strong Money Australia’s REIT guide which examines how REITs work and their role in building diversified investment portfolios.

Business Ownership Investment Strategies

Starting Your Own Business for Maximum Returns

Business ownership can produce 20%+ per year for experienced entrepreneurs who are willing to actively manage their investment by being hands on.

Key success factors are:

• Strong market demand for products or services

• Sustainable competitive advantages over other investors

• Scalable business model to grow

• Enough capital to cover operational costs

To access government resources for starting a business in Australia, explore Business.gov.au’s comprehensive starting guide which offers step-by-step guidance and regulatory information for launching successful business ventures.

Acquiring Profitable Businesses for High ROI

Acquiring profitable operations can deliver 15-25% per year for investors with business management experience who prefer proven income streams over startup risk.

When looking at potential acquisitions look for:

• Consistent cash flows showing operational stability

• Skilled management teams who can continue to grow

• Clear growth opportunities in expanding markets

• Reasonable purchase price to expected returns

For thorough guidance on business acquisition processes and considerations in Australia, visit Scotpac’s complete guide to buying a business which provides practical frameworks for evaluating, financing, and successfully acquiring profitable business operations.

Other High-Return Investment Options

Peer-to-Peer Lending Platforms

P2P lending platforms connect investors with borrowers directly, no banks involved. This direct lending can generate 6-15% per annum for investors looking for regular monthly income through alternative channels.

Australian P2P platforms include established players like RateSetter (now part of Metro Bank) and ThinCats for business lending.

Key risk management strategies:

• Diversify across many loans to reduce concentration risk

• Start small to understand the platform

• Research historical default rates and platform track record

• Monitor market factors affecting borrower performance

To learn about P2P lending regulations and consumer protections, explore MoneySmart’s peer-to-peer lending resource which outlines key considerations and regulatory frameworks for evaluating alternative lending investments in Australia.

Collectibles as Alternative Investment Assets

Collectibles offer portfolio diversification and high returns for informed investors. These physical assets can go up big while protecting against market volatility.

Popular collectible categories to consider:

• Rare coins and precious metals for inflation protection

• Art and vintage collectibles with historical growth

• Classic cars and motorcycles for enthusiast markets

• Wine and whiskey investments combining passion with returns

Risk management is still important when investing in collectibles:

• Research the market before making an investment decision

• Understand the authentication process to avoid fraud

• Consider storage and insurance costs affecting net returns

For guidance on collectibles in investment portfolios and regulatory requirements, check out SMSF Warehouse’s artwork investment guide which covers alternative asset structuring and compliance considerations.

Fixed Income Investment Solutions

Corporate Bond Funds and High-Yield Bonds

Corporate bond funds can give you 4-8% pa from established companies, more income than a savings account or high interest savings account.

Bond types vary by risk and return:

• Investment grade bonds: Lower risk, 4-6% pa

• High-yield bonds: Higher risk investments, 6-10% pa

• Convertible bonds: Equity upside with bond protection

Always check the credit rating before you invest. AAA rated bonds are safe but yield less than higher risk options.

Government Securities for Conservative Growth

Longer term government bonds give you 3-6% pa with government backing, more than a savings account and preserve your capital.

Government securities options:

• 10 year Australian Government Bonds for steady income

• Treasury Indexed Bonds for inflation protection

• Semi-government bonds from state governments with higher yields

For education on bond investing and available bond types in Australia, explore ASX’s guide to bond types and investment solutions which explains different bond categories and their role in investment portfolios.

Managed Investment Fund Options for High Return

Mutual Fund and Index Fund Strategies

Exchange-traded funds and mutual fund options deliver 8-15% per annum through professional management and diversification. These investment fund solutions give you broad market exposure for low-cost access to multiple asset classes.

Top Australian dividend ETFs like VHY, SYI and IHD returned 5.5-5.7% last year, so you can see how they performed across different market conditions.

Popular high-return investment fund categories:

• Growth-focused equity index fund options tracking market performance

• Small-cap Australian ETFs for emerging companies

• Technology sector funds for innovation-driven growth

• International emerging market funds for global diversification

To learn about fund performance evaluation and selection strategies, visit Stockspot’s managed funds resource which examines top-performing funds and offers guidance for constructing effective investment portfolios.

Hedge Funds and Private Equity Access

These advanced investment vehicles target 10-20% per annum through sophisticated strategies, for high net worth investors (min $500k) to access exclusive opportunities and professional money management.

Options for qualified investors include:

• Listed investment companies for hedge fund exposure

• Wholesale managed fund platforms with lower minimums

• Platform-based alternatives for diverse strategy access

• Direct hedge fund investment for large capital holders

To understand hedge fund strategies and their investment applications, explore FundSquire’s hedge fund resource which covers how these sophisticated investment vehicles work and their place in advanced portfolios.

Commodity and Precious Metal Investment Strategies

Gold and Silver Investment Options

Gold and silver can return 5-10% pa and provide inflation protection and portfolio diversification for long term wealth preservation across all market conditions.

Investment options for precious metals exposure:

• Physical gold and silver with storage solutions

• Gold mining individual stocks for leveraged exposure

• Precious metals ETFs for liquid access

• Gold certificates no storage worries

Gold has been going up for the past 2 years and a weak Australian dollar has made local currency returns even better.

Oil and Energy Commodity Investments

Energy investments return 8-15% pa through commodity sector exposure and provide investors with sector diversification and inflation protection during economic uncertainty.

Energy investment options:

• Energy company individual stocks with direct sector exposure

• Oil and gas trusts for income distributions

• Commodity ETFs tracking energy price movements

• Energy infrastructure stock funds for essential services

For practical guidance on energy sector investing, visit Finder’s oil investment guide which outlines various methods for accessing energy markets and essential considerations for commodity-based investments.

International Investment Opportunities

Emerging Market Investments

Developing economies can return 12-18% p.a. for long term investors looking for global diversification and exposure to growing markets and demographic trends.

Key emerging markets to consider:

• Asian growth markets led by tech and manufacturing

• Latin American economies rich in natural resources

• Eastern European opportunities in developing industries

• Frontier market exposure for the brave

Foreign Real Estate and Currency Investments

International property can return 10-20% p.a. including currency benefits, for sophisticated investors with access to large amounts of capital and geographic diversification.

Popular international markets include US REITs, European property funds and Asian REITs to give you exposure to different economic cycles.

For information on overseas property investment strategies and considerations, visit Your Mortgage’s overseas investment guide which covers the key factors and financing options for Australian investors considering international real estate opportunities.

Risk Management for High Return Investment Portfolios

Balancing market risk and return requires considering your financial situation, investment objectives and risk tolerance.

Portfolio Asset Allocation Strategies

Risk factors to consider:

• Your investment timeframe and strategy selection

• Income stability and risk capacity

• Total wealth and position sizing

• Family commitments and liquidity needs

• Personal risk profile and investment choices

General allocation guidelines for different investor types:

• Conservative (6-8% target): 70% bonds/cash, 30% growth

• Moderate (8-12% target): 50% growth, 50% lower risk

• Aggressive (12%+ target): 70-80% shares, 20-30% defensive

Diversification Strategies Across Asset Classes

Effective diversification spreads investments across multiple dimensions:

Asset Classes:

• Australian shares for domestic market exposure

• International shares for global growth

• Property and REITs for inflation protection

• Bond funds for income generation

• Other investments including alternatives and commodities

Geographic Regions:

• Australia and New Zealand for familiar markets

• United States for world’s largest stock exchange

• Europe for developed market diversification

• Asia-Pacific for emerging growth

• Emerging markets for higher growth

Sector Diversification:

• Technology and growth for innovation

• Healthcare and biotech for defensive

• Financial services for interest rate changes

• Resources and energy for commodity exposure

• Consumer goods for stable demand

Time Diversification Techniques:

• Dollar-cost averaging to reduce timing risk

• Regular rebalancing to maintain target allocations

• Staged investment entry to manage market volatility

• Systematic profit taking to capture gains

Conclusion: Building Your High Return Investment Strategy

High returns don’t require complex strategies or high risk tolerance. Success comes from understanding your options, diversifying across asset classes, keeping costs low, being patient and monitoring regularly through your investment accounts.

Set realistic expectations based on your situation – 10-12% pa is achievable with a balanced approach of growth shares, dividend investments and alternative assets. Remember consistency in investment decisions matters more than occasional big gains and compound growth is your most powerful wealth building tool.

Now get to work: calculate your current portfolio return, set specific goals, pick one new strategy to try, set up a monitoring schedule and consider getting advice when dealing with investment funds.

Originally Published: https://www.starinvestment.com.au/best-high-return-investment-options-australia/