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Antonio
@Castell
4Mon·

Help on choosing ETFs in the portfolio

Hi everyone, I am planning to build a portfolio focused on dividends and wanted to get some advice from those who may already have a few more years in the investment world.


My goal is to create a portfolio that allows me to receive dividends every month and that is composed of ETFs that guarantee both dividend growth and, most importantly, NAV growth, all geared for the long term. In addition, I would still like to devote a good portion of the portfolio to accumulation, so that I can grow something that I can reinvest all on dividends in the future (taking advantage through accumulation of self-investment of dividends).


The portfolio I came up with contains the following ETFs:


I have chosen exclusively ETFs for my portfolio, all with global exposure, as I would like the portfolio to be managed as passively as possible, i.e., the ETFs themselves take care of reallocating the weight of companies within them.


The ETFs I have identified allow me to receive monthly dividends, however, I had some doubts regarding the choice of some:

  • Better the $VWCE (-0.04%) or the $FWRG (-0.08%)? The latter is newer and has a lower TER, might it be worth choosing it?
  • I am undecided between the $VHYL (-0.66%) and the $VWRL (-0.07%), in that although the former pays twice the dividend as a percentage, it has a much lower NAV growth than the latter. Which one do you recommend between the two?
  • I am very undecided about whether I really need to add ETFs $ZPRG (-1.07%) e $ISPA (-0.65%), as they offer very high dividends, but their growth has been very low. For the $ZPRG (-1.07%) I could add that 10 percent to the $FGEQ (+0.15%), as they pay the same months, while as for the$ISPA (-0.65%), I don't know of any other ETFs that can pay in the same months (January, April, July, October).
  • Is it actually worthwhile to allocate part of the portfolio to accumulation, or is it better to invest everything in distribution from the beginning? My goal would still be to convert everything to distribution in the distant future.


Beyond these doubts of mine, I am happy to hear other advice about portfolio organization.


Thanks in advance!

6
9 Comments
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O. K. Boomer@randomdude
4Mon
I find it far too complicated. I would limit myself to 2-3 ETFs in order to adjust price and dividend growth on the one hand and the level of distributions on the other. You also have to rebalance this, but it's easier than with 7 ETFs.
My sample dividend portfolio looks like this in the backtest:
https://getqu.in/OUHJcQ/
Decent growth with stable 3% distributions. If you want more, it will only be at the expense of the total return.
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Antonio@Castell
4Mon
@randomdude Thanks for the response! I saw the shared portfolio, there is the ETF $GGRP which seems to have good growth compared to $ISPA, only it does not cover all the months of the latter in dividends. If I found an ETF that paid out in the same remaining months, I would focus everything on $FGEQ, $TDIV and the latter
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Antonio@Castell
4Mon
@randomdude I think I have found an ETF that can guarantee me the continuous flow of monthly dividends. This is the new setup I thought of:
$VWCE - 40%
$FGEQ - 15%
$TDIV - 15%
$HMWO - 15%
$JEGP - 15%

The first one to have an accumulation product that I can use in the future to get cash to use or reinvest, then 3 ETFs with high growth and good dividend yields, and then the JEGP which has high dividends although fairly flat growth. The strengths are precisely those 3 distribution ETFs, which pay dividends quarterly and in different months. What do you think about that? Do you have any advice for me?
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Maximilian@Max095
4Mon
@randomdude I have a combination of the $FGEQ and $TDIV
Perfect for a dividend growth strategy.
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financial_guru_1801@financial_guru_1801
4Mon
Hi Antonio, if you don't have any special needs because everything is distribution, it's not tax efficient at all
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Antonio@Castell
4Mon
@financial_guru_1801 Hi. I know that accumulation is the most fiscally advantageous solution, in fact for this anyway I would like to keep the 40% with single accumulation ETF ($VWCE). However, my goal is to also start a dividend part of the portfolio as of now in order to take advantage of the growth and avoid switching abruptly to distribution in the future. This way I could also establish and study dividend trends over time, which will then be the ultimate solution in the distant future. Do you have any advice on ETFs that I could use? In the comment above I mentioned another possible setup I could adopt, I would appreciate your advice. Thank you!
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50onFire@50onFire
4D
Hi Antonio, your post is a bit dated but it passed me by on the bulletin board. As I read I saw again the thoughts I had at the 'beginning of my journey in the world of finance, 10 years ago. Now I have matured a different point of view that I share on
my getquin and fb profile https://www.facebook.com/share/1ApCWwvds3/

You will not find any absolute truth but a different point of view on investing, maybe it will be useful to you or maybe not. Good luck, friend
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Antonio@Castell
4D
@50onFire Hi, thank you very much for sharing your thoughts. Indeed, the post is a bit dated, and since that day I have continued to accrue different ideas and thoughts on what to do. First, I realized early on (and perhaps unfortunate), that as nice as it might be to receive increasing dividends over time, having to reinvest them manually does not make it automatic and I would prefer something more "set and forget". So I thought I would add thematic ETFs that might outperform in the next few years, such as $IUIT and $XAIX, as well as individual stocks that might continue to grow in the future, i.e., on the top companies (Microsoft, Nvidia, meta, Apple, Amazon, alphabet, broadcom), however, even looking at those, true they have outperformed so far, but they actually have a very high P/E right now and when I made these considerations Amazon in 5 years had grown by a measly 40% or so and besides I would still receive dividends from the companies, in Italy we don't have a broker that allows self-investment. In the end I thought that the best decision, which combines growth (although more conservative) and anyway more "stable" drawdowns, is to invest all over the world, not only on America or developed countries, but on everything. Reason why in the end, for a few months now, I have been opting for a PAC of 80% $VWCE and 20% $BTC, for more explosive decoupled growth potential, even with a view to the halving to come. I know that another ETF has come out that replicates the FTSE All-World, but it would not make sense for me to discontinue and start another pack, I would like a solid and unique base, otherwise I would always have to be looking for the cheapest etf. With this set-up I really feel freer, I don't have to think about reinvesting the dividends, because they are already reinvested. I also did some simulations between the accumulation or distribution, and actually you could, in FIRE, take out a dynamic % of the accumulation investment (3-4%), you would pay less tax, it would be more predictable the amount and most importantly it would grow more because all the dividends (and they grow even the dividends in the accumulation etf because they make percentage), would always be reinvested.

I hope I have not been overly verbose 😅 but I wanted to share the considerations I have accrued along the way, as perhaps they will be useful to those who will read this post. Better to adjust course at the beginning than during the journey.
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Kai P.@DrummerMC
4Mon
Similar to my strategy, just be aware that dividend focus and nav focus are for the most part mutually exclusive. I would separate a nav-focussed part and a div/dist.-focussed part. Keep the former acc. And only the rest distributing. More tax efficient that way.
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