1Mon·

Accumulating or distributing?

My favorite is the $HMWO (-0.43%)especially because the dividend allows me to make the most of my tax-free allowance without having to sell shares or let it expire. I use the dividend to invest in individual items. What is your opinion?

10 Comments

wasi@wasi

1Mon

What do you want to hear? It's already your biggest position in the portfolio

••

Justus41@Justus41

1Mon

@wasi I'm just interested in what others think on the subject

••

Chucky075@Chucky075

1Mon

3 MSCI World ? Isn't one enough ?

••

Alpalaka@Alpalaka

1Mon

@Chucky075 If you are already looking at his portfolio, you could also read the corresponding description :)

••

Dividende > Zinsen@GoDividend

1Mon

@Chucky075 I already had a post about this at some point. But here's the short version again from gemini:

There may well be reasons why it makes sense to have the same index, such as the MSCI World, in your portfolio more than once. Here are some possible scenarios:
1. different ETF structures:
* Distributing vs. accumulating:
* A distributing ETF pays out dividends regularly, while an accumulating ETF reinvests them. Depending on your personal investment strategy and tax considerations, it may make sense to own both variants.
* For example, a distributing ETF can be used to make optimum use of the annual saver's allowance, while the accumulating ETF benefits from the compound interest effect in the long term.
* Physical vs. synthetic replication:
* ETFs can replicate the index either physically (by buying the shares included in the index) or synthetically (through swaps). Both methods have advantages and disadvantages.
* Physical replication is considered more transparent, while synthetic replication can in certain cases provide a more accurate replication of the index.
2. risk diversification:
* Issuer risk:
* Even though ETFs are considered relatively safe, there is a low issuer risk. This risk can be further diversified by spreading it across several ETF providers.
* This is particularly relevant for very large investment volumes.
3. strategic considerations:
* Tax optimization:
* By staggering the purchase of ETF shares, the FIFO (First In, First Out) method can be used when selling to achieve tax advantages.
* Savings plan limits:
* Some brokers have limits on the amount of savings plans. To circumvent these, savings plans can be set up multiple times on the same ETF.

•

Justus41@Justus41

1Mon

@Chucky075 😅 That's mainly because they were bought at different times. I'm also stopping investing in the HSBC MSCI World now because the dividend is already around €700 a year and I still want to keep a bit of tax allowance free for interest etc. The rest will be invested in the iShares MSCI World. I still have the Invesco MSCI World because I bought it earlier and don't want to switch so that I don't have to pay tax on the gains yet.

•

Chucky075@Chucky075

1Mon

@GoDividend thanks for the detailed answer, now I'm a bit smarter again

••

Saschko@WarrenamBuffet

1Mon

am also invested ^^

••

Stonksonlygoup@SOGO

1Mon

It's the same whether you receive dividends or sell shares

••

Dividende > Zinsen@GoDividend

1Mon

@SOGO Since no one knows how high the tax burden will be in 20, 30 or 40 years, I am happy to accept the annual tax burden and opt for distributing options

•