Hey @TradingHase,
You’ve dug up some interesting figures for your spare change and broken them down very clearly. But let’s take a hard look at the data—and especially your final conclusion—because you’re mixing apples and oranges here.
Here’s the reality check for your decision-making:
**1. The elephant in the room: EQQQ is NOT a dividend ETF**
Right at the start, you write that your capital is supposed to flow into a “dividend ETF.” If that’s your real, strategic goal (regular cash flow), then the **Invesco EQQQ** has absolutely no place in this specific selection.
* The EQQQ tracks the Nasdaq-100. That is the ultimate U.S. tech growth engine, but not an income instrument.
* Your own data proves this mercilessly: The current dividend is a paltry 0.17%.
* Your conclusion to choose the EQQQ if one “offsets the dividend with capital gains” is, from a so-called “total return” perspective, entirely correct. However, this undermines your own goal of a dividend investment, as defined in the first sentence.
**2. The Real Showdown: TDIV vs. VHYL**
If we remove the tech outlier EQQQ, we’re left with the classic showdown between the dividend heavyweights:
* **VanEck ($TDIV):** As your figures correctly show, it delivers the highest dividend yield (currently 3.14% or 3.90% over 1 year). The TDIV applies very strict filters for dividend quality and sustainability, but focuses exclusively on established industrialized countries (developed markets).
* **Vanguard ($VHYL):** This is the global, stoic sledgehammer. It offers slightly lower dividends (currently 2.36% according to your data), but it also includes emerging markets and is extremely broadly diversified across the globe. It often doesn’t perform as dynamically as the TDIV, but it’s a massive rock in the storm.
**3. The Topic of Diversification**
* If you choose the **EQQQ**, you’ll have extreme concentration in the U.S. tech sector. This brings massive price gains in bull markets, but also brutal downward volatility when the tech sector takes a hit.
* In contrast, the **VHYL** offers you the ultimate global diversification in a single product.
* The **TDIV** is excellent for pure cash flow, but excludes pure growth stocks (since these often don’t pay high dividends).
**My tip and food for thought for you:**
Before buying, you need to make a cold, hard decision about what the *purpose* of this position in your portfolio should be:
1. **Do you want passive income and strong, reliable cash flow?** Then go with the **TDIV** for maximum returns or the **VHYL** for maximum global diversification.
2. **Do you want maximum capital growth (total return)?** Then go with **EQQQ** without hesitation. But then say goodbye to the idea that this is a “dividend investment.”
Choose the strategy, not just the past return figures!
Best regards!
You’ve dug up some interesting figures for your spare change and broken them down very clearly. But let’s take a hard look at the data—and especially your final conclusion—because you’re mixing apples and oranges here.
Here’s the reality check for your decision-making:
**1. The elephant in the room: EQQQ is NOT a dividend ETF**
Right at the start, you write that your capital is supposed to flow into a “dividend ETF.” If that’s your real, strategic goal (regular cash flow), then the **Invesco EQQQ** has absolutely no place in this specific selection.
* The EQQQ tracks the Nasdaq-100. That is the ultimate U.S. tech growth engine, but not an income instrument.
* Your own data proves this mercilessly: The current dividend is a paltry 0.17%.
* Your conclusion to choose the EQQQ if one “offsets the dividend with capital gains” is, from a so-called “total return” perspective, entirely correct. However, this undermines your own goal of a dividend investment, as defined in the first sentence.
**2. The Real Showdown: TDIV vs. VHYL**
If we remove the tech outlier EQQQ, we’re left with the classic showdown between the dividend heavyweights:
* **VanEck ($TDIV):** As your figures correctly show, it delivers the highest dividend yield (currently 3.14% or 3.90% over 1 year). The TDIV applies very strict filters for dividend quality and sustainability, but focuses exclusively on established industrialized countries (developed markets).
* **Vanguard ($VHYL):** This is the global, stoic sledgehammer. It offers slightly lower dividends (currently 2.36% according to your data), but it also includes emerging markets and is extremely broadly diversified across the globe. It often doesn’t perform as dynamically as the TDIV, but it’s a massive rock in the storm.
**3. The Topic of Diversification**
* If you choose the **EQQQ**, you’ll have extreme concentration in the U.S. tech sector. This brings massive price gains in bull markets, but also brutal downward volatility when the tech sector takes a hit.
* In contrast, the **VHYL** offers you the ultimate global diversification in a single product.
* The **TDIV** is excellent for pure cash flow, but excludes pure growth stocks (since these often don’t pay high dividends).
**My tip and food for thought for you:**
Before buying, you need to make a cold, hard decision about what the *purpose* of this position in your portfolio should be:
1. **Do you want passive income and strong, reliable cash flow?** Then go with the **TDIV** for maximum returns or the **VHYL** for maximum global diversification.
2. **Do you want maximum capital growth (total return)?** Then go with **EQQQ** without hesitation. But then say goodbye to the idea that this is a “dividend investment.”
Choose the strategy, not just the past return figures!
Best regards!
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@Raketentoni Thanks so much for breaking it down. 👍🏼 I selected those three ETFs on Finanzfluss using the "Dividend ETFs" filter. When I wrote down the dividend figures, I was actually a bit surprised by the amounts.
You’ve raised a very important point here for me and Spiel.
So the EQQQ is out for me, since I’m targeting dividends and I’m already invested in tech through individual stocks.
As for the other two, I find the respective approaches you outline so sharply interesting.
They might both find their way into my portfolio.
You’ve raised a very important point here for me and Spiel.
So the EQQQ is out for me, since I’m targeting dividends and I’m already invested in tech through individual stocks.
As for the other two, I find the respective approaches you outline so sharply interesting.
They might both find their way into my portfolio.
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•@TradingHase I’ve added the $TDIV and the $FYEQ to my portfolio for diversification. This way, I also have quality assets from emerging markets with a good overall return in my portfolio. The Tdiv has a 60% allocation to Europe if you add up all the countries.
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•@Raketentoni That’s an interesting idea, too. Given the TDIV’s heavy exposure to Europe, I could remove the two STOXX components and split the portfolio. I haven’t held any emerging markets for quite some time now.
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@Raketentoni I have the $HDEM instead of the $FYEQ, combined with the $TDIV
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@erbsinator
We have two emerging markets (EM) ETFs here that, at first glance, seem to be after the same thing (dividends from emerging markets), but operate in completely different ways behind the scenes. To get straight to the point: the Invesco ETF is severely lacking in fundamental quality.
Let’s take a hard look at both ETFs:
### 1. The Invesco FTSE EM High Div. Low Vol. (The Yield Trap)
This ETF uses an extremely blunt filter. It simply picks out the stocks from emerging markets with the historically highest dividend yield (“High Div”) and then filters them based on the lowest price volatility in the past (“Low Volatility”).
* **The problem:** An extremely high dividend yield usually results from the stock price having plummeted massively beforehand. So here, you’re systematically buying companies that are currently being punished by the market (classic value traps).
* **The missing filter:** The Invesco ETF **does not** ask why. It does not check whether the operating margin is sound, whether revenue growth is intact, or whether the dividend is even covered by genuine free cash flow. It simply buys blindly into the highest-looking yield. And in the worst-case scenario, “low volatility” means only that the stock doesn’t fluctuate wildly, but instead falls a little further each day in a completely stoic and unflappable manner.
### 2. The Fidelity EM Quality Income (FYEQ) (The Scalpel)
Here, the word “Quality” isn’t just marketing—it’s a rigorous, fundamental screening mechanism. Before this ETF invests a single cent, companies must clear tough financial hurdles.
* **The Cash Machine Test:** The FYEQ looks deep into the balance sheets. It filters for consistent margins, solid free cash flow, and a healthy debt structure.
* **Sustainability over greed:** Only once it’s proven that the company earns real, hard cash and the dividend isn’t paid out of assets or new debt (pseudo-dividend) does the stock make it into the portfolio.
### The Brutal Truth for Your Portfolio
If you buy the Invesco fund, you’re adding a basket full of potential turnaround candidates to your portfolio—companies that currently (still) pay high dividends but whose underlying strength is often crumbling.
If you want to build a stoic, indestructible dividend foundation where payouts are secure in the long term, you absolutely must look at the fundamental numbers. And that’s exactly the tough job the FYEQ does for you. In the dangerous emerging markets, it separates the real cash cows from the pure story stocks with no substance!
Best regards!
Raketentoni
We have two emerging markets (EM) ETFs here that, at first glance, seem to be after the same thing (dividends from emerging markets), but operate in completely different ways behind the scenes. To get straight to the point: the Invesco ETF is severely lacking in fundamental quality.
Let’s take a hard look at both ETFs:
### 1. The Invesco FTSE EM High Div. Low Vol. (The Yield Trap)
This ETF uses an extremely blunt filter. It simply picks out the stocks from emerging markets with the historically highest dividend yield (“High Div”) and then filters them based on the lowest price volatility in the past (“Low Volatility”).
* **The problem:** An extremely high dividend yield usually results from the stock price having plummeted massively beforehand. So here, you’re systematically buying companies that are currently being punished by the market (classic value traps).
* **The missing filter:** The Invesco ETF **does not** ask why. It does not check whether the operating margin is sound, whether revenue growth is intact, or whether the dividend is even covered by genuine free cash flow. It simply buys blindly into the highest-looking yield. And in the worst-case scenario, “low volatility” means only that the stock doesn’t fluctuate wildly, but instead falls a little further each day in a completely stoic and unflappable manner.
### 2. The Fidelity EM Quality Income (FYEQ) (The Scalpel)
Here, the word “Quality” isn’t just marketing—it’s a rigorous, fundamental screening mechanism. Before this ETF invests a single cent, companies must clear tough financial hurdles.
* **The Cash Machine Test:** The FYEQ looks deep into the balance sheets. It filters for consistent margins, solid free cash flow, and a healthy debt structure.
* **Sustainability over greed:** Only once it’s proven that the company earns real, hard cash and the dividend isn’t paid out of assets or new debt (pseudo-dividend) does the stock make it into the portfolio.
### The Brutal Truth for Your Portfolio
If you buy the Invesco fund, you’re adding a basket full of potential turnaround candidates to your portfolio—companies that currently (still) pay high dividends but whose underlying strength is often crumbling.
If you want to build a stoic, indestructible dividend foundation where payouts are secure in the long term, you absolutely must look at the fundamental numbers. And that’s exactly the tough job the FYEQ does for you. In the dangerous emerging markets, it separates the real cash cows from the pure story stocks with no substance!
Best regards!
Raketentoni
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•@Raketentoni I think I'll have another chat with my trusted AI. On second thought, the FYEQ might actually fit better into the overall concept.
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@Raketentoni Thanks for another excellent analysis. I’d be interested to hear your thoughts on a comparison between $FYEQ and $IEEM
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•@Novius At first glance, I’d think the dividend payout is the key issue here 🤷🏼♂️
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@TradingHase Yes, probably. That said, "your" dividend strategy is currently yielding a dividend return of around 1.5%.
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•@Novius Hey @Novius!
I’m really glad the analyses are helping you! The question of how it compares to the $IEEM is a classic one, because it pits two completely different investment philosophies against each other: mindless market breadth vs. strict quality selection.
Let’s lay both contenders out on the dissection table and take a cold, hard look:
1. The iShares MSCI Emerging Markets ($IEEM) – The massive oil tanker
The $IEEM is the absolute standard index tracker. It simply buys over 1,300 companies from emerging markets based solely on market capitalization. If a company is big enough, it gets in—no matter what the balance sheet looks like.
The problem: You’re taking on massive concentration risks here. State-owned conglomerates from China or highly indebted commodity giants automatically end up at the top of the pot because they have enormous market capitalization.
The dividend: While the IEEM does pay out (distributing), it is not a dividend or income ETF. The yield usually hovers somewhere in the meager range of 2.0% to 2.5% because it also contains hundreds of tech growth stocks that don’t pay out a single cent.
2. The Fidelity EM Quality Income ($FYEQ) – Our surgical scalpel
The FYEQ throws blunt market capitalization overboard and mercilessly runs emerging markets through a fine-mesh quality sieve.
The filter: Before a stock is included here, it is screened for stable operating margins, genuine profits, healthy debt levels, and, above all, sustainably covered free cash flow. Unprofitable companies are immediately weeded out.
The result: Although it contains significantly fewer stocks, it provides you with a focused selection of true cash machines. As a result, the dividend yield is historically much more attractive and stable than that of the IEEM.
The verdict is crystal clear:
If you simply want to cover the entire EM world and aren’t bothered by meager payouts or unprofitable state-owned enterprises in your portfolio, go with the IEEM.
But for those seeking a solid income foundation where dividends must be earned through genuine operational substance, there is absolutely no way around the FYEQ. It filters out the junk from emerging markets before it reaches your portfolio.
For a true quality dividend strategy, the FYEQ wins this duel in the first round by knockout! 🥊
I’m really glad the analyses are helping you! The question of how it compares to the $IEEM is a classic one, because it pits two completely different investment philosophies against each other: mindless market breadth vs. strict quality selection.
Let’s lay both contenders out on the dissection table and take a cold, hard look:
1. The iShares MSCI Emerging Markets ($IEEM) – The massive oil tanker
The $IEEM is the absolute standard index tracker. It simply buys over 1,300 companies from emerging markets based solely on market capitalization. If a company is big enough, it gets in—no matter what the balance sheet looks like.
The problem: You’re taking on massive concentration risks here. State-owned conglomerates from China or highly indebted commodity giants automatically end up at the top of the pot because they have enormous market capitalization.
The dividend: While the IEEM does pay out (distributing), it is not a dividend or income ETF. The yield usually hovers somewhere in the meager range of 2.0% to 2.5% because it also contains hundreds of tech growth stocks that don’t pay out a single cent.
2. The Fidelity EM Quality Income ($FYEQ) – Our surgical scalpel
The FYEQ throws blunt market capitalization overboard and mercilessly runs emerging markets through a fine-mesh quality sieve.
The filter: Before a stock is included here, it is screened for stable operating margins, genuine profits, healthy debt levels, and, above all, sustainably covered free cash flow. Unprofitable companies are immediately weeded out.
The result: Although it contains significantly fewer stocks, it provides you with a focused selection of true cash machines. As a result, the dividend yield is historically much more attractive and stable than that of the IEEM.
The verdict is crystal clear:
If you simply want to cover the entire EM world and aren’t bothered by meager payouts or unprofitable state-owned enterprises in your portfolio, go with the IEEM.
But for those seeking a solid income foundation where dividends must be earned through genuine operational substance, there is absolutely no way around the FYEQ. It filters out the junk from emerging markets before it reaches your portfolio.
For a true quality dividend strategy, the FYEQ wins this duel in the first round by knockout! 🥊
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