3D·

VWCE vs. VWRL

Dear ETF friends,

I need your expert opinion. At first I had started to save the $VWCE (+1,12 %) and thought an accumulating variant would be easiest. But now I have often heard dissenting voices and had also put some cash into the $VWRL (+1,01 %) I had also put some cash into it. Briefly about me: I am 37 and therefore still have time until I retire, I spend a lot of time with my portfolio anyway and would therefore have no problem reinvesting dividends independently with the paying-out variant.

Pros / cons? Please no other suggestions. One of the two should definitely stay and serve as a private pension. The $VWCE (+1,12 %) has the much better entry price for me. My exemption order has already been more than exhausted. So maybe you could leave the other one and just stop saving in it? I would be grateful for any tips from you.

Many thanks 🤗

33 Comentarios

Kate🦋@Iwamoto

Regardless of your decision, which can be based on many factors, such as tax aspects or your withdrawal strategy, I would consider not selling the "wrong" one in any case, but simply leaving it as it is.

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AI sagt@GoDividend

@Iwamoto just as much as I do

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Sandy@DividendenMieze

@Iwamoto Would you like to tell me why you opted for the payout option?

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Kate🦋@Iwamoto

@DividendenMieze Okay, here's the short version: basically, it's almost the same. There are also no longer any relevant tax differences, at least in Austria. My goal is to live off capital gains one day and I think the distributing ETF is the best way to do that. That way, I don't have to sell any shares and hope that they will recover before I run out at some point.

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Sandy@DividendenMieze

@Iwamoto Thank you so much Kate 🙏

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Femke@femkelbn

For me it was exactly the opposite. I started with $VWRL and have since switched to $VWCE. It was clearly the simplest option for me if the goal is long-term wealth accumulation and the money is not needed until retirement. ☺️

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Sandy@DividendenMieze

@femkelbn It sounded simpler to me too, that's why I started with it and the money will definitely only be needed when I retire. Did you reallocate or leave the other one?

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Femke@femkelbn

@DividendenMieze Due to personal circumstances, I had to liquidate my entire portfolio anyway and then simply started again with the other one. Otherwise I would probably have just left it for tax reasons.

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Basti@RogerWilco

In the end, it's simply a question of personal preference. In the end, the difference will be minimal.
I would simply save in one and leave the other. I don't see any real advantage in switching, i.e. selling everything and investing in the other one.

Especially because you still have a lot of time, in the end the amount under discussion will only make up a few percent of your portfolio.

Oh yes, and listening to others is not necessarily the best decision on the stock market in my experience so far.

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Sandy@DividendenMieze

@RogerWilco Thank you for your detailed answer. It's not so much about listening to others - I had also decided on this ETF on my own. But perhaps I have overlooked or not understood something. I keep reading here that you should switch to a payout option when you retire anyway, and I'm worried about that. At least everyone here agrees that I shouldn't sell one and I'm definitely grateful for the advice.

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Basti@RogerWilco

@DividendenMieze Well, I mean the issue of which variant is better now, and that the majority you have found now disagrees with you.

And I don't think it's a good approach to change your opinion to a payout option when you get older.

You then pay a lot of taxes, which means you lower the value of your portfolio. If you sell and then buy the distributing one again. You then leave a good return behind. Keyword tax deferral effect. There are videos on this from Finanzfluss or Finanztipp.

Also, if you start earlier with distributing, you should have a lot more shares than if you switch later, and thus get a better dividend yield if you start early with distributing, or am I thinking wrong?

For me, it is therefore a very clear point to decide this issue long before retirement. That's why I'm a distributing investor. Reinvesting every few months isn't really that much of an effort, because reinvesting straight away is easier.

My idea is quite clear: I don't have to sell what is distributed in the future as shares.

I'm sure some people will find an argument against it.

That's also what I meant by making your own decisions and not being guided too much by others. Let them be of the opinion that one or the other is better. I go my own way and I'm happy with it.

In the end, it's your money, your life, your pension.

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Sandy@DividendenMieze

@RogerWilco I don't think I can do anything wrong with either of them. I'm glad to have finally invested at all. I only ever saved in a call money account because I was too scared of shares. I only started in 02/2023 and can now say: I wish I had started earlier - but that's another topic. Thank you for your thoughts on my post!

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Basti@RogerWilco

@DividendenMieze Yeah, ask me. 😅🤣 I started much later than you. Not in terms of time, but in terms of age. I basically only started with Corona when I was 45. I was able to get in cheaply, but I would still have been happy if I had started when I was 17.
But that's the way it is now. Just make the best of it. And I can say that so far I'm well on the way to having enough money in my old age. Even though I started late with shares.

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Pezi@Pezi

As I plan to use up my investment in retirement and not bequeath it, I have several similar ETFs.

I save up to a certain amount in ETF1, then ETF2, then ETF3, etc.

The payout plan is then in reverse order.
This means that the ETF with the lowest return will be the first one to be withdrawn. With first in first out, you would lose a lot of return with just one ETF...

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Sandy@DividendenMieze

@Pezi sounds wild 😅 i'll have to look into it. i won't be bequeathing anything either.

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Pezi@Pezi

@DividendenMieze it is better explained here 😉

https://m.youtube.com/shorts/lMW7903eOI4

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Christoph@ChrisBizz

Very good 👍🏻

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Gomerdoc@Gomerdoc

15H

Interesting approach. It definitely makes sense for investors who want to sell their shares at some point (e.g. for retirement provision)!

If you are pursuing more of a dividend strategy or are making ends meet with this dividend strategy, I don't think this is relevant:

In that case, only the current capital gains are taxed, and they are always the same, regardless of whether I bought it 30 years ago or yesterday. The tax burden on the dividends paid out in each case is the same.

But once again: good approach! To be honest, I'd never thought about it before.

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income_engineer_2486@income_engineer_2486

I am doing the same, I focused my portfolio on global ETFs to build a strong long-term foundation. VWCE is my compounding fund, the longer I hold it, the faster it grows each year while VWRL is for medium-term goals like buying a house or car.

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Sandy@DividendenMieze

@income_engineer_2486 thank you so much

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six@six

I now only have the accumulating one, as it simply has the tax advantage.

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Sandy@DividendenMieze

@six I have probably not yet understood this benefit, as the input tax was deducted directly from my account at the beginning of the year. On the other hand, I would also have to pay tax on all dividends.

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six@six

@DividendenMieze The up-front lump sum is significantly lower than what you pay in taxes on the distributor.
And the up-front lump sum is only due if the ETF has risen and the prime rate also plays a role.
Incidentally, it may also be the case that you have to pay an advance lump sum for distributors.

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Sandy@DividendenMieze

@six I find the argument very convincing to stick with my first decision. Thank you very much!

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Eselai@DonkeyInvestor

Rationally, it is the $VWCE 👍

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ETFKing@ETFKing

I chose $VWRL as my core in order to minimize the need for later reallocation in old age and the associated tax expense

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IntrinsicMind@IntrinsicMind

Due to the tax effects (already mentioned here several times), I would always continue to save in the accumulating fund.
The compound interest effect is more pronounced there.

I would also switch ETFs every 10 years to optimize tax access in the sale or retirement phase.
You then sell the units of the "newest" ETF first (with the potentially lowest increase in value) and bypass the FiFo principle for your oldest units (with the potentially highest increase in value).

This way, you can at least play a little trick on the socialists 😉 .

With this in mind: See you at the next Taylor Night 🎇🎊🌈

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Sandy@DividendenMieze

@IntrinsicMind only 4 more weeks 🥳 then I can thank you personally, because it sounds like a good solution for me 🙏

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mr.x@_mrx_

Personally, I pay attention to the phase you are in when choosing between accumulating and distributing:

1. neutral; there are no withdrawals and no additions in the long term = accumulating

2. accumulation phase; accumulation is almost always the most popular option due to: A) lower transaction costs, as you don't have to buy new shares with the dividends, B) less effort for reinvestment, C) small tax advantage, D) self-discipline = accumulation

3. liquidity requirements; the liquidity required is lower than the distributions, which would be an argument in favor of distributing. However, there is more work involved if you want to reinvest.

Personally, I save with accumulation, as this makes the most sense for me in the savings phase and I am not tempted to do something else with the dividends :D.

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Sandy@DividendenMieze

@_mrx_ many thanks 🙏

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Max@Divident_e

What exactly is the question now?

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Sandy@DividendenMieze

@Divident_e I can't explain it any other way than posed, and since others have understood the question, just keep scrolling 😎

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Dylan V.@Legend14

I always wonder, maybe I’m thinking wrong. Vwrl got like €2 dividend a year but the vwce VS vwrl price difference is like €1 over all those years?

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