Reallocation | Simplification of dividend portfolio

3Semana

@Yield-Ahead Thank you for your input. The investment case was to have at least a combination of dividend growth and distributions. But with https://www.portfoliovisualizer.com/ I did some backtest 6 ETFs or only 3 ETFs (last 5 years performance) and there was already a good return "lost" through price growth with less distributions but that makes me a bit doubtful.

For example, since 2020, a combination of VanEck Morningstar + Fidelity Global Quality and Dow Jones US would be much more profitable than the 6 together. But how to know beforehand

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3Semana

Right from the start, I opted for just 3 ETFs. Precisely because I didn't want to split it up too much.

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3Semana

@Metis I can understand, that's where my uncertainty comes from

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3Semana

@BockaufDividenden You would probably have to back-calculate different combos, which would have produced only 3 instead of 6 ETFs with the same invested capital for a personal dividend yield to make a qualified statement, but it does make sense not to split the capital across too many positions in order to get as much growth/dividend growth and personal dividend yield as possible.

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3Semana

@Metis I have actually combined a few portfolios and tried them out at https://www.portfoliovisualizer.com/manage-portfolios and there were already bigger differences, e.g. in 5 years over 6000€ more price gain, but about 1500€ less dividends in total. The question then is whether you want to have more dividends from the start or more book profit....If it continues like this in the future, sure

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3Semana

@BockaufDividenden I don't know your investment period of course, but I have tried to find ETFs with a good mix of dividend growth (with a "lower" starting dividend) and sufficient share price growth.
Personally, it doesn't help me with a +30 year investment period if they pay out a lot of dividends but don't have any real price growth over time.
Then I prefer to take lower current dividend payouts, with high dividend growth and good share price growth.

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3Semana

@Metis My investment period is also easily 20-30 years. But it's fun to see how much more they grow year after year, which is why I planned to take one high-dividend fund and one with more growth for each distribution interval.

Supplemented by REITs + BDCs. And then I also want to include various shares based on certain criteria, so that I can gradually reduce ETFs, but let's see

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3Semana

@BockaufDividenden And my thought was that a high-dividend-paying one is of less use to me now.
On the other hand, one with a lot of growth naturally needs significantly more paid-in capital for the same amount of dividends here and now, but in the end I want more dividends later and not as many dividends as possible now.
That's why I'd rather go for a high-growth company with strong dividend growth, which will hopefully be able to pay out significantly more dividends later on and massively increase my individual dividend yield.

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3Semana

@Metis Completely understandable, that's why you have the $FUSD and the $GGRP in your portfolio. I have the $FGEQ so as not to have too high a US share and am just considering whether the $EXX5 is better than $GGRP or not. In my opinion, the Dow Jones has performed better depending on the period, e.g. the last 5 years + higher dividends during this time.
But looking at the last 8 years, Wisdom has performed better overall.

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Kalle@Brazzo_Muc

3Semana

I have three ETFs of which $VHYL is the only one that pays out dividends. The three are each saved monthly. For me, 6 ETFs would be too many, but everyone has to do what they feel comfortable with. There are people in the community who are all in $BTC others do core sattelite. Just do your thing 🥳

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3Semana

@Brazzo_Muc Yes, I would like to do core satellites, but the question is whether 3 or 6 ETFs..... Of course, you shouldn't forget the partial exemption in relation to ETF distributions and normal shares

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3Semana

I was faced with the same consideration at the beginning of 2024. At that time with just under 70 individual stocks, reallocated to too many ETFs and now broken down to $MAIN $ARCC $HTGC as BDCs. There are also 4 ETFs in the savings plan - $FGEQ, $TDIV and $JEPQ + $JEGP.

In particular, $JEGP has proven to be a good anchor, $JEPQ brings the high distributions and the last two should shine globally with some growth. Each of the 4 etfs receives at least €250 per month, the non-covered call etfs receive the reinvested dividends per month on top.

I adjust the plans 1-2 times a year and let them run.

I only use Getquin for tracking (monthly average amount).

Emerging markets, commodities and futures are not saved as an asset class.

I feel quite comfortable with this at the moment and am taking care of more important things.

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3Semana

@Lethetrendbeyourfriend Thanks for your assessment, did you not feel comfortable with your 70 individual stocks or did the ETFs you mentioned simply provide the better yield + dividends?

I've already looked at $JEPQ and $JEGP but I'm not sure whether I should leave my €10,000 there $O. It was also emphasized in another thread that the two ETFs are of course better than the REIT from a tax point of view

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3Semana

@BockaufDividenden I was in over my head with the 70 stocks, I had too much effort to manage my investment for 0.5 to 1.5% more potential total return. I wanted to start the autopilot via ETFs as I no longer had enough time to keep up to date with the many companies, cyclicals and sectors.

The ETFs bring similar returns, the same growth and my focus has shifted to "I never want to sell anything".

If I was purely interested in returns, I would have invested in an s&p 500 ACC or $XDEM.

$O was a savings plan position for me for a long time, also in the 5-digit range, but the growth is so low that I simply didn't feel like it anymore and I saw opportunity costs, i.e. the money would be better off elsewhere. In the long term, $ARCC and $MAIN will be my only stocks. $HTGC did very well, but is too volatile for me with its bioscience focus.

The two covered call ETFs will be weighted together at 20%, the BDCs also at 20%, and the remaining 60% will be made up of $FGEQ and $TDIV.

In the long term, I would like to move away from individual stocks and let my savings plans run without much thought.

My portfolio return is in the TR with a Msci World, with less drawdown and more dividend focus (including dividends).

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3Semana

@Lethetrendbeyourfriend I completely understand the 70 stocks, that's not a small number either. I would rather go towards 30 different stocks, which I think is still possible, actually take established moat dividend stocks and also pillow over them via a savings plan, that's the plan.

What bothers me about the ETFs are the many other stocks below the TOP10, which tend to be "dead" stocks, have hardly any growth or hardly carry any weight....

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3Semana

@BockaufDividenden I had exactly the same background thought, what about the 80% low weighted stocks.

But the average return and the automatic rebalancing were more important to me.

When do I know which securities I should invest in and when, but if other securities develop momentum on the left and right, I just get annoyed, so I reduce and let the ETF provider decide, accepting the healthy average in return.

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3Semana

@Lethetrendbeyourfriend Yes, that's really the crux of the matter, when is something super good, I think you have to buy something on your watchlist when the price is falling or something and accumulate more cash. I would just like to build up positions like Helmut Jonen and simply not touch any more but just collect dividends.

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3Semana

@BockaufDividenden I think everyone would like that, but his income is and probably was significantly higher than mine 😅.

I keep the 25-50% savings rate and let it run. Increase income and adjust savings rate, the fruits will come. 🤝

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3Semana

@Lethetrendbeyourfriend Yes, his income was guaranteed to be good, he was also employed in the banking sector, but he started his main portfolio with an initial 30,000 DM from his father and then gradually invested it, like all of us here.

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Ludwig@CopLui

3Semana

Sorry for cheekily joining in your conversation 😅 I can fully understand your thoughts and also decided on a total of 4 distributing ETFs at the beginning of 2024. I've been saving in these every month since then and gradually adding to all the other positions up to 2.5k per individual security.

I have around 40 individual stocks and I'm finding it difficult to part with them. The more money flows into these ETFs, the higher the running costs naturally become. In my early 30s, it's hard to imagine that this could become a major cost block in a few years' time. I also realize that the growth in distributions can hardly keep pace with the potential dividend growth of the individual stocks.

Do you share these concerns or do you see things completely differently? 🤔

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