3Mon·

High-dividend distributing ETF or rather without distribution

I am considering investing 1/3 of my equity exposure in the $FLXD (-0.07%) in the European high-dividend stocks. 2/3 are in an MSCI World Quality ETF, i.e. USA-heavy.

Better diversification because Europe? And simply taking the dividend of almost 4% is not bad either? But I don't always need the money from the distribution immediately, so I reinvest it...

Or would I rather invest in a non-distributing ETF?

10 Comments

Stulle 🥪@Stullen-Portfolio

3Mon

Focusing on dividends is not the highest-yielding idea you can have as an investor anyway. 💔

And in general, accumulating ETFs have a built-in yield turbo compared to their distributing siblings. 🚀

Greetings
🥪

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View all 6 further answers

Saschko@WarrenamBuffet

3Mon

I would rather take the $EXSA, which has a slightly lower divi yield but is also better diversified in terms of sectors; the fund mentioned above has 32% financials at the start. You just have to be aware that it also has a fund volume of less than 100 million...

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TomTurboInvest@TomTurboInvest

3Mon

As long as you reinvest the dividends, there is hardly any difference between these two forms.
As an Austrian, the disadvantage of accumulators is that you have to pay tax on the distribution-equivalent income from the accumulation every year, i.e. you have to hold cash for larger positions and performance tracking becomes difficult because your cost value and the tax-relevant cost value diverge.
For me, this is a reason to avoid accumulators.

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Joris@JorisInvests

3Mon

I have FLXD as well. I think it has 52 decent companies in it, which will give ok growth and dividend growt in the future. Taxes on dividends are often viewed as negative, but I think the cash flow outweighs it by far. It is the fee you pay to get a part of your invested money back without needing to sell and I'm willing to pay for that. I'm also half-way in my career, so accumulators aren't for me any more. You have to think of many things as an investor and for me I don't want to think about selling accumulating etfs later in life, so all my etfs are distributing 😉😎😉.

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