1Wk·

ETF rebalancing

Hi everyone,

I need your swarm intelligence.

I am currently in both the $TDIV (-0.6%) as well as in $VHYL (-1.43%) invested. I also have the core $IWDA (-0.32%) as accumulating.

I am considering whether I should transfer the $VHYL (-1.43%) into the Van Eck and increase my savings rate for the MSCI to keep my allocation more or less the same.

What do you think?

7 Comments

Dividende > Zinsen@GoDividend

1Wk

I would not transfer.
Just build the next position.
A $GGRP for example

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Stulle 🥪@Stullen-Portfolio

1Wk

@GoldenShield

...or even $GGRG -> which has the yield turbo built right in 😁✌️

Greetings
🥪

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Dividende > Zinsen@GoDividend

1Wk

@Stullen-Portfolio but Stulle. Dividends are like butter 🤣

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Stulle 🥪@Stullen-Portfolio

1Wk

@GoDividend
may be 🤷✅🧈😋

...but not distributing 😉

[in the original Stullen-Portfolio®️ the butter is represented by the Nasdaq 😎, 10%, naturally swap, naturally accumulating 🧈]

Greetings
🥪

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Dividende > Zinsen@GoDividend

1Wk

@GoldenShield your question to Gemini. (You have to do it 😅😅 I think you can talk about it endlessly):

The evaluation of such an issue and the formulation of an opinion are complex, as they depend on many factors that are not evident in the picture shown. These include, among others:
* The user's personal financial goals:
* Is the goal wealth accumulation, income, risk minimization role?
* What investment horizon is being pursued (short, medium, long-term)?
* How high is Philip Buß's risk tolerance?
* The composition of the overall portfolio:
* What other investments does Philip Buß own besides the ETFs mentioned?
* Are there other asset classes (real estate, bonds, commodities)?
* How is the overall asset allocation structured?
* The exact characteristics of the ETFs mentioned:
* $TDIV: An ETF focused on dividends (to be inferred from the name "TDIV" and "dividend" in the commentary).
* $VHYL: A "high yield" ETF (to be derived from the name "VHYL"), i.e. also dividend-oriented and potentially focused on high distributions.
* $IWDA: An MSCI World ETF that is accumulating (which is good for long-term wealth accumulation as income is reinvested). This is a very broadly diversified index.
* "Van Eck" and "MSCI": It is unclear here whether this is a Van Eck ETF on the MSCI World or another MSCI index.
* The reason for the change:
* Why does Philip Buß want to "transition" the $VHYL? Are there any problems with the current ETF (costs, performance, index changes)?
* Why does he want to increase his savings rate for the MSCI? (Which in itself is often a good idea to strengthen the core position).
General assessment and opinion (based on the sparse information):
Without the above details, I cannot give specific investment advice. Financial advice requires a precise knowledge of the individual situation. However, I can assess the situation from a neutral, information-based perspective:
* Diversification and core-satellite strategy:
* It appears that Philip Buß is pursuing a kind of core-satellite strategy in which the $IWDA (MSCI World) forms the "core" (broadly diversified, accumulating, good for long-term wealth accumulation).
* The positions $TDIV and $VHYL appear to be the "satellites" that pursue a specific orientation (dividends, high yield).
* Problem: Focusing on dividend and high yield ETFs can lead to less diversification as they are often focused on specific sectors or regions and can increase risk, especially if they are not well aligned with the core portfolio. High yield often means higher volatility and exposure to company performance.
* Accumulating vs. distributing:
* $IWDA is accumulating, which is advantageous for tax and compound interest purposes.
* $TDIV and $VHYL are likely to be distributing (typical for dividend ETFs). This can lead to tax disadvantages if the distributions have to be taxed immediately and are not reinvested.
* Suggestion of "dividend > interest":
* The advice to "don't transfer" and "just build the next position" (e.g. $GGRP) is generally often sensible if there are no serious reasons for selling the existing position (e.g. high costs, poor index replication). Transaction costs and potential tax burdens from the sale should always be taken into account.
* However: adding another dividend position ($GGRP) could further increase the already existing concentration on dividend ETFs if this does not meet the overall diversification objective.
My "opinion" as an information model:
Based on best practices in long-term wealth accumulation, I would tend to favor the following:
* Strengthening the core position: the idea of increasing the savings rate for the MSCI (probably $IWDA) is a good decision in most cases, as the MSCI World offers very broad and low-cost diversification.
* Critical review of satellites: The need for dividend and high yield ETFs ($TDIV, $VHYL) should be critically scrutinized. If the goal is long-term wealth accumulation, too much focus on dividend ETFs can reduce returns or increase risk, as they often overweight certain sectors (e.g. financials, utilities, consumer staples).
* Avoid unnecessary transactions: If the $VHYL is serving its purpose and there are no valid reasons to sell, transferring should be avoided to minimize transaction costs and tax burdens. It is often better to achieve a desired change by adjusting future savings rates.
* Overall portfolio approach: Each individual ETF should be considered in the context of the entire portfolio. Does it fit the overall strategy and risk tolerance?
To summarize: Philip Buß should define his exact goals and risk tolerance. Strengthening the MSCI World as a basis often makes sense. The role of dividend and high-yield ETFs should be critically reviewed in terms of diversification and total return. The advice "do not transfer" is usually a good first impulse to avoid unnecessary costs.

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Philip Buß@GoldenShield

1Wk

@GoDividend Thank you for the detailed summary 😅

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Abteilungsleiter D.@AbteilungsleiterDerLiebe

1Wk

@GoldenShield I wouldn't reallocate because I don't think you'll ever be able to get the shares at such a low price again. A sale may incur tax etc. etc. For me, the VanExk is also less diversified with its 100 shares. I would simply leave it alone.

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