While I wandered through Rostock and Schwerin, spent a frugal night and found a moment of peace in Schwerin Cathedral, my depots simply carried on doing their thing. No hectic rush, no manual interventions, no nervous glances at my smartphone. The automation of my reinvestments, savings plans and standing orders is simply worth its weight in gold!

And then, right in that moment of silence in the cathedral, a message demanded my attention. It was the moment when the biggest dividend of the month arrived. A sign from the very top, or timing straight out of a picture book? Back home at the end of the month, a new player became apparent in the portfolio, which advanced into the top 5. But catching up with my strongest stock is still a long way off for the new challenger. Time for a review.

Overall performance

For me, November in general was the same as always: steady and boring. I didn't even really notice that the US budget shutdown had ended. Just as well, because business as usual can continue.

My key performance indicators for my overall portfolio at a glance:

• TTWROR (month under review): +1.40 % (previous month: +1.39 %)
• TTWROR (since inception): +79,75 %
• IZF (month under review): +18.54 % (previous month: +9.65 %)
• IZF (since inception): +11,22 %
• Delta: +1,211.47 €
• Absolute change: +€2,398.46

Performance & volume

$AVGO (-0,56 %) remains the heavyweight in the portfolio, but as mentioned in the introduction, there is a new challenger that made significant gains in November and has now moved into the top 5. $GOOGL (+0,8 %) pulls past $BAC (-0,05 %) . They have just delivered. New Gemini and Nano Banana version. The constant new advances in AI are the clear driver here. But watch out! The question in the future will be who will earn money with AI. Will it be those who have integrated it into their products or those who create the basic prerequisites for its use via data centers and hardware? I am curious.

And even if this competition is super exciting, these values are not in my sights, more on that later in the outlook.

Size of individual stock positions by volume in the overall portfolio:

Share ( %) of total portfolio (and associated portfolio):

$AVGO (-0,56 %) 3.57 % (main share portfolio)

$WMT (+0,23 %) 1.75 % (main share portfolio)

$GOOGL (+0,8 %) 1.56 % (main share portfolio)

$NFLX (-0,03 %) 1.60 % (main share portfolio)

$BAC (-0,05 %) 1.46 % (main share portfolio)

Smallest individual share positions by volume in the overall portfolio:

Share ( %) of the total portfolio (and associated securities account):

$NOVO B (-1,13 %) : 0.45 % (main share portfolio)

$GIS (-0,26 %) : 0.56 % (crypto follow-on portfolio)

$BATS (+0,09 %) 0.57 % (main share portfolio)

$TGT (+0,19 %) 0.57 % (main share portfolio)

$MDLZ (+0,66 %) 0.59 % (main share portfolio)

Top-performing individual stocks

Shares with performance since initial purchase ( %) (and the respective portfolio):

$AVGO (-0,56 %) : +369 % (main share portfolio)

$NFLX (-0,03 %) +120 % (main share portfolio)

$GOOGL (+0,8 %) +119 % (main share portfolio)

$WMT (+0,23 %) +95 % (main share portfolio)

$OHI (+0,19 %) + 90 % (main share portfolio)

Flop performer individual stocks

Shares with performance since initial purchase ( %) (and the respective portfolio):

$TGT (+0,19 %) : -35 % (main share portfolio)

$GIS (-0,26 %) : -35 % (main share portfolio)

$NKE (+0,16 %) -31 % (main share portfolio)

$NOVO B (-1,13 %) -29 % (main share portfolio)

$CPB (+0,32 %) -26 % (main share portfolio)

Asset allocation

Equities and ETFs currently determine my asset allocation.

ETFs: 41.3 %

Equities: 58.6 %

Crypto: 0.0 %

P2P: less than 0.01 %

Investments and subsequent purchases

I have invested the following amounts in savings plans:

Planned savings plan amount from the fixed net salary: € 1,030

Planned savings plan amount from the fixed net salary, incl. reinvested dividends according to plan size: € 1,140

Savings ratio of the savings plans to the fixed net salary: 49.75

In addition, the following additional investments were made from returns, refunds, cashback, etc. as one-off savings plans/repurchases:

Subsequent purchases/one-off savings plans as cashback annuities from refunds: € 75.00

Subsequent purchases/one-off savings plans as a cashback annuity from bonuses: € 21.98

Subsequent purchases from other surpluses: € 0.00* (additional purchases are only made in December)

Automatically reinvested dividends by the broker: € 2.08 (function is only activated for an old custody account, as I otherwise prefer to control the reinvestment myself)

Unscheduled purchases were made on various securities accounts outside the regular savings plans:

Number of unscheduled purchases: 9

21.98 € for $SPYW (-0,29 %)

35.00 € for $SPYW (-0,29 %)

40.00 € for $GGRP (-0,11 %)

35.00 € for $GGRP (-0,11 %)

Passive income from dividends

I received € 113.15 in dividends (€ 82.45 in the same month last year). This corresponds to a change of +37.36 % compared to the same month last year. For a rather weak month, this is a great sum, which I am grateful for and from which I made a small donation in addition to reinvesting, as I did in September and October. Other key figures:

Number of dividend payments: 22

Number of payment days: 10 days

Average dividend per payment: € 5.60

average dividend per payday: € 12.32

The top three payers in the month under review were:

$IWDP

$ZPRG (-0,05 %)

$HTGC (+0,15 %)

My passive income from dividends (and some interest) mathematically covered 12.59% of my expenses for the month under review. Acceptable for a weak month with medium-high expenses (by my standards).

Crypto performance

As I play by the cycle theory, I got out of crypto completely in October. The share was previously insignificant in my portfolio anyway, but the harvest has nevertheless been reaped. Only the Oracle of Delphi knows whether I am right with my approach. There was more in an earlier getquin post from me, in which I explained my assumptions and strategy in detail.

So there are no key figures to report. Now it's time to learn and understand.

Performance comparison: portfolio vs. benchmarks

A comparison of my portfolio with two important ETFs shows the TTWROR in the current month (and since the beginning):

My portfolio: +1.40 % (since I started: +79.75 %)

$VWRL (-0,12 %) -0.50 % (since my start: 62.52 %)

$VUSA (-0,1 %) -0.48 % (since my start: 58.04 %)

Finally performed better than my chosen benchmark ETFs.☺️

Risk figures

Here are my risk figures for the month under review:

Maximum drawdown: YTD: 17.17% (month under review: 2.34%)

Maximum drawdown duration: 702 days since inception (reporting month: 14 days)

Volatility: YTD: 28.15 % (in the month under review: 2.44 %)

Sharpe Ratio: YTD: 0.39 (in the month under review: 7.63)

Semi-volatility: YTD: 20.91 % (in the month under review: 1.75 %)

The maximum drawdown of 702 days since the beginning is a long period 2022-2023 before the year-end rally began at the end of 2023. Otherwise the figures suit me well.

My Sharpe ratio of 0.39 YTD shows that I have achieved a return of 0.39 units above the risk-free rate per unit of risk.

My vola of 28.15% YTD is the direct footprint of the loud roar and then small cave-in of Trump's tariff policy. It has proven itself again: For me as a long-term investor, what counts is simply staying calm and buying the dip when another dip comes.

Outlook

I still have some money left over from my food and drugstore budget, but I won't be (re)investing it until December with the surpluses I hope to have by then. I've chosen a boring REIT that won't be $O, but still pays out monthly dividends and has long been a position in my portfolio. Strictly speaking, I've seen little or no mention of this stock among the financial tycoons recently. You'll see which one in the next review.

The last point will be a little more personal again. Loyal readers of my reviews will know from the August review that this summer I was diagnosed with aortic ectasia of the ascending aorta near the heart as a result of the bicuspid and insufficient aortic valve. An incidental finding that will be treated with the necessary seriousness through close monitoring and an upcoming operation. And precisely because of this, it is no longer the ticking time bomb that it would be if it were still undetected and possibly larger. The knowledge of this and now my own adjustment to day X is gradually changing my way of thinking. Before the discovery, when I was just a patient with a leaky aortic valve who regained a lot after changing my lifestyle for the better, e.g. exercise, I was influenced by the idea that I had a lot of time to implement what was on my mind. Now I know that I want to get a few things done before the day of the procedure and the lengthy recovery. I am now aware of the issue of time in a whole new way. Why am I writing this publicly? Because I want to show that finances are certainly important, but only one piece of the puzzle of life.

So, that's enough writing. With that in mind, have a wonderful Christmas.

Thank you for reading. Stay healthy and happy!

👉 You can also see my review on Instagram from next week (portfolio review from 8.12.25 and budget review from 9.12.25).

📲 In addition to the portfolio and budget review, there are currently three posts a week: @frugalfreisein

!!! Please pay close attention to the spelling of my alias. Unfortunately, there are too many fake and phishing accounts on social media. I have already been "copied" several times.

👉 How was your month at the depot? Do you have any tops and flops to report? Leave your thoughts in the comments!

I started investing at the beginning of the month and have spent the last three weeks building up a portfolio with the aim of accumulating wealth over the long term. I am now relatively familiar with the topic, have analyzed many strategies and have decided on an approach based on two pillars:

1. growth portfolio:

I invest in broadly diversified ETFs such as the $VWCE (-0,06 %)combined with thematic focuses such as $XAIX (-0,28 %) and the healthcare sector. I also invest in individual stocks such as $NVDA (-0,53 %), $BRK.B (+0,28 %) or $TTWO (-0,43 %) - the latter deliberately as a small position for the speculative component (GTA VI hype is realistically not entirely irrelevant).

2. distributing dividend portfolio:

Here I am betting on classic dividend stocks. These include the $VHYL (-0,16 %), $SPYW, (-0,29 %)
$SEDY (+0,13 %) as well as individual stocks such as $KO (+0,07 %) or $ALV (-0,28 %). The aim is to generate a steady cash flow that can be reinvested in the long term.

I am aware that there is no perfect distribution. That's why I'm interested in your opinion:

• Which stocks would you weight higher or reduce?
• Is there anything that doesn't fit in at all from your point of view?
• How do you balance growth and dividends?

I am open to criticism, experience and other perspectives.

The first quarter of 2025 is over. In March, real assets recorded declines, both in equities and ETFs and especially in cryptocurrencies. The markets have become increasingly volatile. While many are panicking, I have been enjoying the first signs of spring, hiking and continuing to winter bathe diligently.

For the past month of March 2025, I present the following points:

➡️ SHARES

➡️ ETFS

➡️ DISTRIBUTIONS

➡️ CASHBACK

➡️ AFTER-PURCHASES

➡️ P2P CREDITS

➡️ CRYPTO

➡️ AND OTHER?

➡️ OUTLOOK

➡️ Shares

There was a considerable setback in March, and not just in equities. The reason for this is the customs issue, on which I have already formulated my thesis, which many believe to be correct. To summarize briefly: Markets are being depressed to get investors into bonds, which lowers bond yields and allows US debt to be refinanced at a lower interest rate. After the refinancing of short-term US government bonds, the tariffs are put into perspective and the next upswing follows, which Trump can boast about. Whether this assumption is correct remains to be seen. However, it would make sense in the long term to slash US spending. Even if the D.O.G.E. does a good job, you can't cut everything without incurring the displeasure of the population.

A look at the depot shows the front-runner $AVGO (-0,56 %) and its companion $NFLX (-0,03 %) both currently only 150% up, despite a significant setback. I am unimpressed by this development, as the capital market is always facing worse times, which will be followed by better ones. According to André Kostolany, it is now the "shaky hands" that are significantly triggering the sell-off. Yes, change your perspective: the red sign in your portfolio is irrelevant, now is the time to buy more. Enormous overvaluations in tech stocks have been reduced and they may now be available at a fairer price. There are also attractive defensive value stocks on offer, ideal for a dividend portfolio.

Second and fourth place in my individual share portfolio are still occupied by $WMT (+0,23 %) and $SAP (-0,04 %) . Walmart can now prove that it acts as a stable anchor in the portfolio even in bad times. In sixth place is a stock that I did not expect to be in the top 10. Like me, many of you have shares in $WM (+0,95 %) but the stock I am looking for is its competitor: $RSG (-1,5 %) . I have been watching the rise of this stock even before the pressure from Trump and I am happy about it. This is an example of a defensive stock. Garbage collection is necessary and Republic Services, like Waste Management, will literally turn garbage into gold for shareholders 50 years from now. Anyone complaining about their portfolio being down 50% probably has too much tech and too little defensive. My overall portfolio currently stands at around -12%. That's OK in the current macro environment.

Which brings us to the subject of performance: $NKE0 (+0,21 %) and $DHR (-0,04 %) returned around -39% at the end of March.

➡️ ETFs

They are also recording significant losses. It is important to remain calm and continue investing. Such phases are part of the game. I will not repeat further details.

➡️ Distributions

In March, I received 31 distributions on 15 payout days. I am grateful for this additional income stream. Everyone should build up such additional income.

This time, the distributions from my three large ETFs were not made on March 31, but in the first few days of April. This means that there should theoretically be 34 distributions. Numerous corrections and cancellations of dividends from REITs were not taken into account. With $O (+0,52 %) , $OHI (+0,19 %) , $LTC (+0,06 %) and $STAG (+0,15 %) there were therefore some cancellations and new dividend distributions. Although this was a major bureaucratic effort, it was usually a cause for celebration. This is because the REITs initially distribute dividends from current net income. If there are then corrections in the following year, it is determined that a distribution is also made from the already taxed retained earnings. This subsequently reduces the company's tax burden and I have noticed that I pay less capital gains tax and solidarity surcharge. So more cash in my pocket for reinvestment.

➡️ Cashback

In March, I received a small amount of income from an expense report, which I invested directly in my custody account. More on this under subsequent purchases.

➡️ Subsequent purchases

The additional purchases were financed from the expense report and, above all, from the bonus paid out by my employer. I am grateful for this, as my employer is not doing well at the moment.

I made numerous additional purchases in several ETFs that are in my small old portfolios. I invested smaller sums $GGRP (-0,11 %) , $JEGP (+0,01 %) , $SPYW (-0,29 %) , $FGEQ (-0,04 %) and $SPYD (-0,1 %) and bought a larger sum in shares of the $IWDP. On the last Friday in March, I checked my portfolio and realized that, despite careful use of the surplus, there was more cash left than I had expected. I therefore made a small additional purchase in the $VNA (-0,45 %) . For me, Vonovia (like the REITs) is a kind of hedge against my own rising rent.

➡️ P2P loans

With my last P2P platform, Mintos, there were no interest or redemption payments. I still intend to withdraw all funds where released. I would even accept a full write-off to get out of the platform. The remaining amount is no longer relevant to me.

➡️ Crypto

Crypto investors continued to experience significant volatility in March. The double top predicted by some does not seem to be materializing and the indicators do not currently point to a steep rise. I am studying the charting and the macro environment for crypto, although I still have a lot to learn here. Patience and calm are still required. I am sticking to my cycle strategy, the macro situation confirms me, so there is no need for me to take any action.

➡️ And what else?

I'm currently deepening my knowledge of AI. The posts on my Instagram channel that I published in March (and others that will follow in April) were created with the help of AI. I explained my approaches, beliefs about finance and the frugal lifestyle, and my goals to AI. The AI then created suggestions for Instagram posts, including prompts and allowing for a week break at the end of the month.

There is still a lot for me to learn. I am using AI more and more intensively and deeply in my professional and private life. While colleagues are happy that an AI can write emails for them, I use it much more extensively, for example to have technical content and its effects on departments and companies explained to me at work or to have economic relationships explained to me in my private life. In addition to ChatGPT, I particularly like Grok by X, as this AI always asks questions and thus enables a fluid conversation. The AI doesn't just reproduce facts, but also evaluates my ideas and classifies them, for example whether I should already use part of my nest egg to buy more quality stocks at favorable prices. Her suggestion was perhaps to wait until after the refinancing of short-term US government debt, when there might be less downward volatility in the market. This recommendation is based on my thesis mentioned above.

March was also a month of fasting for me, not for religious reasons, but because I want to and always intend to. I like to use the time after fasting to change my habits, adjust my diet and vary my sports units and routines. For me, this is particularly easy after fasting - the time afterwards generally feels like a new beginning.

➡️ Outlook

In April we will continue to see negative signs in the portfolio. I have now placed a limit order, which I hope will be triggered. The annual electricity bill is also due. I'm curious to see how much will be returned, the refund will certainly go into the custody account. It will also become clear whether I will increase my discount due to higher electricity costs. Until then!

Links:

Social media links can be found in my profile, you can also take a look at the Instagram version of my review.

February is over. While there was still snow and temperatures well below zero, I went winter swimming again and used my vacation and weekends for short trips to Dresden, Potsdam and Berlin. Thanks to the Germany Ticket. The investment knew what to do by itself for a while. Time for a look back.

I present the following points for the past month of February 2025:

➡️ SHARES

➡️ ETFS

➡️ DISTRIBUTIONS

➡️ CASHBACK

➡️ AFTER-PURCHASES

➡️ P2P CREDITS

➡️ CRYPTO

➡️ AND OTHER?

➡️ OUTLOOK

➡️ Shares

Things were actually going really well for my shares, but there were some serious headwinds from the other side of the pond: tariffs are coming. And that naturally moved my portfolio too. My giant $AVGO (-0,56 %) was now only up +200%, with a clear downward trend. But that still leaves me cold, because technology stocks are of course heavily overvalued. So it's bound to happen that someone lets the air out. I was pleased because my savings plan was executed at a more favorable price.

$NFLX (-0,03 %) goes down slightly, the $SAP (-0,04 %) remains stable in terms of performance and volume compared to the previous month. With the 2nd place by volume $WMT (+0,23 %) not too much has happened either. So as far as the stocks at the front end of the chain are concerned, February was not really eventful. The same applies to the lower areas.

Whereas last month the banking and financial sector moved ahead in terms of volume, I now notice the $RSG (-0,16 %) and $SYK (-0,06 %) which continue to fight their way to the top of the portfolio. This is exciting, as I have always seen these stocks as good midfield performers, but not candidates for the top positions.

➡️ ETFs

As always, ETFs are doing their thing. What can you say except the typical? Don't rely on the state pension, build your own ETF pension. Anyone who doesn't invest is simply - I can't put it any nicer - stupid and lost. And I think that there have now been enough warnings from every political direction, as well as from various other perspectives and media, that the pension will not be enough. That's why my inner voice tells me that those who don't take care of their old age will only have themselves to blame for their misery and I even think it's unfair if others, who perhaps have little income and are cutting back in order to build up assets, have to be fleeced in order to protect the idle. At least that's what my inner voice tells me. Certainly a controversial opinion, feel free to write yours in the comments.

➡️ Distributions

I was able to collect 19 distributions on 9 payout days in February. I am grateful for this additional income stream. Everyone should build up their additional income this way.

➡️ Cashback

In February there were two reimbursements from the health insurance company, which I treat as "cashback". One was a subsidy for prophylaxis and the other was a payout from the bonus program. As I don't plan either of these as income, there was extra money to distribute. More on this under subsequent purchases.

➡️ Additional purchases

I used the subsidy for the prophylaxis to purchase a one-off savings plan in the $SPYW (-0,29 %) plan. I initially put the payout from the bonus program to one side.

➡️ P2P loans

With my last P2P platform, Mintos, there was no interest or redemption payment. I still want to withdraw everything here. I would even accept a complete write-off to get out of the platform. In any case, the remaining amount on the platform is no longer relevant.

➡️ Crypto

Crypto investors experienced book losses in February. $BTC (-0,01 %) fell from over USD 103,000 to under USD 80,000, and other cryptocurrencies also fell. $ETH (-0,09 %) and other cryptocurrencies.

I remain patient. We are a long way from my exit prices and no improvement is expected in March. We will have to wait and see and possibly add to our position.

➡️ And what else?

I currently see a major threat to the prosperity on which the German welfare state is built. Wokism, cancel culture and, above all, reliance on the state is a huge problem, as is the ever-inflating state. We Germans have far too little awareness of personal responsibility and the wrong mindset.

You are always the average of the people around you. So if you surround yourself with the wrong environment, you will never be able to develop better habits. That's why I think you should always surround yourself with people who are already where you want to be, be it in terms of sport, career, setting up a business or finances.

In February, for example, I met up with people who are also interested in investing and the stock market for a regulars' table in rural Saxony-Anhalt, naturally at the invitation of a Youtuber who I have been following for a long time and who is a frugalist himself. Each of the participants had a different background, different ideas, but the knowledge that you have to do something yourself and the will to get ahead in life united us. The meeting was simply wonderful because I usually only meet people (especially in my day-to-day work) who don't think about the difficult tomorrow. And I'm not just talking about very young people, but also baby boomers. I myself maintain that pensions will no longer be secure for them either. What happens if Germany gets into financial difficulties, for example if government spending continues to rise and income can no longer keep up? The cancel culture certainly means that low-income earners prefer to go on state benefits, or that people who are able to work do not leave the citizen's allowance at all. I don't have a solution for this myself.

But we all know that the state is becoming ever more bloated. On the one hand, it can't prevent this if it has to provide for more and more people (e.g. an increase in the number of baby boomers soon to retire or people who [have to] go into the citizen's allowance). On the other hand, the state doesn't want to prevent this bloating either, as it is deliberately increasing its size through bureaucracy and new official structures. Do we actually need them?

And here comes my assumption. What if this CAP cannot be solved by printing money, as it would become excessive and the welfare state would no longer function? Citizen's income is an entitlement under certain conditions, but having an entitlement does not mean that the entitlement will be enforced. The best example is childcare places. If there aren't enough, you can still be entitled to them. So what happens when social benefits can no longer be financed? No matter how much entitlement there may be. That doesn't help anyone. I deliberately paint a black scenario to get the last person to make their own provisions!

There are 45.6 million people in employment in Germany, 34.8 million of whom are subject to social insurance contributions, 5.3 million of whom are in the public sector. In simplified terms, this means that around 29.5 million keep the economy running through taxes. And thus consequently keep the welfare state alive through social security contributions. Please also remember that 100,000 well-trained skilled workers leave our country every year. Germany has invested in them in the form of general and university education. And entrepreneurs or institutions in the country have invested in them through vocational training, further and advanced training and wages and salaries. I can understand anyone who wants to leave the country and live elsewhere. Instead of condemning these people, we should finally initiate a change in policy so that Germany becomes more attractive again and 100,000 taxpayers don't leave.

As I said, I'm deliberately painting the devil on the wall, but there won't be enough of the 29.5 million taxpayers left to keep things running forever. I haven't even considered the fact that many well-qualified people will retire and won't be replaced by equally well-qualified people. In any case, the risk that the welfare state will cease to function at some point is great enough for me to expect that what we consider normal today will or can no longer be normal at some point. In any case, I have heard the warnings and prefer to build up my own assets and additional income that will cushion me.

So: build up your own assets and income and stay away from government influence/opinion mongering and deceptive promises about a supposedly secure welfare state, as you will end up on your own when things get serious.

➡️ Outlook

Trump's next tariffs are coming into force, sending shockwaves through the markets, and even now, as I write this article in March, my portfolio is noticeably affected. In March, I will receive a reimbursement from my supplementary dental insurance and a bonus from my employer. You can read what I'm going to invest it in in the March review. Until then!

Links:

Social media links can be found in my profile, you can also check out the Instagram version of my review.

Disclaimer: No investment advice or recommendation, this article is for information purposes only. Before you decide on an ETF, take a closer look at it in terms of positions

take a closer look at positions, sampling, regions, etc. I can't describe all of this

I can't describe everything, as it would go beyond the scope of this article

Part 1 (definition, categories & Z-score and quality factor): https://getqu.in/RCSY4a/

Part 2 (Value ETF): https://getqu.in/Nfnhqb/

Part 3 (Low Volatility ETF): https://getqu.in/Ub7KpG/

Part 4 (Momentum ETF): https://getqu.in/CNMgGw/

Part 5 (Small and Growth ETF): https://getqu.in/0NoqmW/

What are dividend ETFs?

Abbreviated what dividends are, since everyone here probably knows this: distributions by a company to its shareholders, the amount is usually voted on at the annual general meeting and is usually paid out of profits, but does not have to be (if it is paid out of the substance, this is often counted as a bad indicator).

Dividend ETFs are therefore primarily ETFs that distribute the dividends paid by companies to the ETF holders; they are also referred to as distributing ETFs (Dist.). In contrast, an accumulating (Acc.) ETF uses the dividends to buy more shares, i.e. it reinvests.

Because the dividend ETF distributes money, I get cash flows back from my investments, usually on a quarterly basis. These ETFs are celebrated - especially on social media - as a form of passive income and have their advantages but also disadvantages, which we will examine in more detail below.

Dividends as a value premium (CAPM /French Fama model)

Short recap (in more detail in part 5): French Fama's 3 factor model raises beta (volatility), size- and value-premium as factors to determine the expected return of an investment. Dividends are not explicitly mentioned as a factor, but they are indirectly included in the value and beta factors, as a company must first be able to afford to pay dividends.

must first afford to pay dividends. Growth and small-cap companies

often do not yet pay dividends, as the revenue generated is used for more growth

growth or the balance sheets are not yet as sustainable. Dividend payers often have a stronger balance sheet, which makes them less volatile to changes in interest rates, for example (although this reduces the expected return according to the CAPM). Exceptions are high dividend payers, which are often riskier and reward investors with a high dividend for holding the share.

The fact that dividends also count as a quality factor can be clearly seen in the dividend aristocrats. These are companies that have been paying dividends continuously for 25 years and increase them annually. This makes them particularly attractive, which is why they can also be invested in via individual products such as the $SPYD (-0,1 %) are investable.

Dividends are also included as a valuation factor in the Quality ETF as a positive valuation criterion (see also Index Methodology Part 1)

Historically, several studies for the US market show an outperformance of dividend stocks, especially even high dividend payers:

https://www.hartfordfunds.com/insights/market-perspectives/strategic-beta-etfs/what-drives-dividend-stock-performance.html

https://www.globalxetfs.com/content/files/High-Dividend-Stocks-In-Rising-Interest-Rate-Environments.pdf

In the recent past, however

However, high-dividend stocks have underperformed in the recent past, with the ACWI High

Dividend has significantly underperformed the MSCI ACWI over the last 10 years (- 100 %).

Classes of dividend ETF?

In my view, dividend ETFs can be roughly divided into 3 categories:

- Dividend as a windfall: The focus of the ETF is not on dividends, but some companies are included in the index that pay dividends and these are then distributed to the holder. A classic example is the dividend-paying $VWRL.

- Quality dividend: The focus is on achieving dividends, but these are accompanied by quality factors such as dividend aristocrats or quality dividend ETFs

- High Dividend: The highest dividend yields are targeted here, whereby quality factors may play less of a role.

Why high dividend yields can be a problem

Unfortunately, I have often overheard conversations that sound like: "VW is so cheap, you get a 10% dividend yield, you can't go wrong". But that brings us to the problem of high dividend yields, because these are often a signal of structural weakness in the company and/or a sharp fall in the share price. If the dividend yield remains at this level, this could seriously jeopardize the company's long-term financial strength. If the dividend yield remains

and is even reduced, the original investment case is invalidated.

So even if the unsystemic individual risk in ETFs often "diversifies away", it is important to take another look at the largest positions and check whether this is not a structurally weakening company.

Advantages of dividends

In addition to the potential value premium mentioned above, dividends fulfill a different purpose at an individual level, depending on the stage of life: for most people reading this, this purpose is likely to be psychological, as they are not dependent on the cash flow from dividends.

cash flow from dividends. The dividends are then a nice motivational effect and

offer the "peace of mind" of a steady income even in the event of market setbacks

and therefore less worry about declining book profits.

Once you have reached an advanced age, the dividend offers a high comfort factor. This means that there is often no need for rebalancing or a withdrawal plan, as would be the case with accumulating ETFs. The dividends are then used as additional income for retirement; of course, withdrawals can also be made, but not to the same extent as would be necessary with accumulating ETFs.

would be necessary.

Disadvantages of dividends

Taxes! Because payments are distributed to the holder, capital gains tax, solidarity surcharge (26.375% in total) and, if applicable, church tax are also due. This tax is first deducted before I can reinvest the dividends, and reinvesting the dividends costs extra (even with neobrokers via the spread between the ask and bid price). Dividends therefore have a detrimental effect on the compound interest effect of the ETF's profits.

Although accumulating ETFs have been brought somewhat into line with dividend ETFs in terms of taxation with the advance lump sum taxation, they still offer the advantage that the tax burden is always lower than for dividend payers (if the dividend ETF has distributed less than the advance lump sum, an advance lump sum is also charged).

Another negative aspect that goes hand in hand with the above is market timing. Often not every small dividend is reinvested directly, but accumulated until, for example, EUR 1,000 is reached in the clearing account. If the market has then run away, you wait for a setback and may miss the entry or at least lose the lost performance where the money was sitting in the settlement account without earning interest.

account without interest. There is also more work involved in the savings phase due to the necessary reinvestments.

Tax comparison high-dividend vs accumulating (example 2024)

Assumption that the tax-free amount has already been exhausted

Investment amount: 100,000

ETF1: Vanguard FTSE ACWI High Dividend ($VHYL (-0,16 %))

ETF2: iShares MSCI ACWI ETF ($ISAC (-0,11 %) )

Tax Burden High Dividend:

Price at the beginning of the year: EUR 57

Shares: 100,000 / 57 = 1,754.39

Dividend per share: EUR 1.94

Absolute dividends: EUR 3,403.51

Partial exemption ratio: 30%

Tax (26.375 %) = EUR 628.38

Tax burden accumulating ACWI

Fund value at the beginning of the year: EUR 100,000

Prime rate 2023 (for 2024): 2.55%

Base yield (70%): EUR 1,785

Partial exemption rate: 30%

Up-front lump sum: EUR 1,249.50

Tax (26.375%) = EUR 329.56

There is a tax disadvantage of around EUR 300, which is thus withdrawn from compound interest.

For whom are dividend ETFs worthwhile?

In summary, the disadvantages of strongly dividend-oriented investing outweigh the advantages for me. Of course, there are many shades of gray between focusing on high dividends and reinvesting. Dividends as an addition - especially as they often come with a premium - make perfect sense, but the explicit focus on high dividends can be dangerous and has tax disadvantages.

Dividend ETFs are therefore primarily for investors who want to generate income regardless of the current market phase and appreciate the stability of the cash flow. If the dividends also ensure that you can sleep better at night when the market fluctuates and are not tempted to panic sell, then the small tax disadvantage is no reason not to invest.

the small tax disadvantage is no reason not to invest in dividends. Also

It also has its charm to have a less intensive withdrawal phase in old age.

withdrawal phase. So if you are emotionally affected by market fluctuations, appreciate regular income and are convinced of the dividend premium (as part of the value premium), then dividend ETFs are just right for you.

👉Dividends-ETFs:

Performance comparisons incl. dividends

$VHYL (-0,16 %) (World | TER 0, % | Tracking Difference -0.04 % | DivRendite 3 %| EUR 5 bn invested volume | 3Y underperformance vs. MSCI World - 5 %pt | 5Y underperformance vs. ACWI - 30 %pt | 10Y underperformance vs. ACWI -100%pt)

• Index methodology: Based on the FTSE All-World Index, which includes large and mid-cap companies from developed and emerging markets worldwide. REITs are excluded. Companies are sorted according to the expected 12-month dividend yield and the stocks with the highest dividend yield are selected. The aim is to achieve around 50% of the market capitalization of the original index and then to weight these companies according to their size in the index.

$TDIV (-0,03 %) (World | TER 0.38 % | TD 0.47 % | Div yield 4.3 % | EUR 1.2 bn invested | 3Y outperformance vs. ACWI + 18 %pt | 5Y underperformance vs. ACWI - 7 %pt | 8Y underperformance vs. ACWI - 38%pt)

• Index methodology: Screening for consistent dividend payers with ESG relevance. Weighting by dividend max. 5% per share and max. 40% per sector. Selection of 100 stocks with the highest dividend yield. Semi-annual rebalancing

$SPYD (-0,1 %) (US | TER 0.35 % | TD -0.07 % | Dividend yield 1.5 % | 3.5 bn invested | 3Y underperformance vs. S&P 500 -23 %pt | 5Y underperformance vs. S&P 500 - 63 %pt. | 10Y underperformance vs. S&P 500 - 283%pt.)

• Index methodology: Includes components of the S&P Composite 1500, then selects for companies with the highest dividend yield whose dividends have been increased for the last 20 consecutive years. Furthermore, minimum requirements for market capitalization and liquidity of the share must be met. Maximum weighting per share 4%.

$SPYW (-0,29 %) (Europe | TER 0.30 % | TD -0.35 % | DivRendite 3.7 % | 3Y underperformance vs.

Eurostoxx 600 - 1 %pt. | 5Y underperformance vs. Eurostoxx 600 - 24 %pt | 10Y underperformance vs. Eurostoxx 600 - 28 %pt.)

• Index methodology: Based on the S&P Europe Broad Market Index, companies must have increased or maintained stable dividends for 10 consecutive years, selection of the 40 companies with the highest dividend yield and weighting accordingly. Max. 5 % per share, 30 % per country/sector.

Conclusion - what remains: A balanced strategy with dividends as an admixture can make sense, whereby the focus should be on quality dividends rather than high payouts.

#smartbeta
#etf
#dividende

Spring is in full swing, my tomato plants are flowering and soon there will be delicious "yields". Time for a look back at May.

➡️ Shares

With an incredible +148% $AVGO (-0,56 %) in my portfolio. The model student is not only the performance winner, but also the heavyweight in terms of portfolio volume among the individual shares. The share has long since cracked the €1,300 mark in terms of volume and is continuing its journey. I am not letting this horse out of the stable á la Beate Sander. I could well imagine that a split is imminent here, after the $NVDA (-0,53 %) recently completed. Otherwise there is hardly any news, the performance of the good stocks continues to rise and the negative performance of my flop stocks is steadily improving. Thus $DHR (-0,04 %) only at -24% instead of -30%. That's how it has to be. You can just feel a moderate wave lifting the boats. In favor of the ETFs, I will leave the comments on the stocks short this time.

➡️ ETFs

With this review, I'm going to take a closer look at my ETFs. I originally started with a 50/30/20 strategy on the MSCI World, EM and Europe, which I later supplemented with an Immo and Small Cap ETF. So the MSCI World with the MSCI EM ETF formed the core portfolio and the other ETFs were small satellites around it.

As these were almost all accumulators at the time and I quickly realized that I could build up additional income by saving in distributing ETFs, I quickly said goodbye to the accumulators. I also moved my ETF custody account to a neobroker. This is where I now manage my large ETF portfolio, which will form the absolute basis of my retirement provision. So if the dividends are not enough, or if I have to sell the portfolio and a sale is unavoidable, then the shares will be sold off piece by piece first and the ETFs will only be touched later. This portfolio contains the $VWRL (-0,12 %) , $VHYL (-0,16 %) , $VUSA (-0,1 %) , $ISPA (-0,08 %) , $IMEU (-0,29 %) and $IWDP . The current portfolio content consisting of an All World ETF and geographic and/or thematic shear points around it does further justice to the core-satellite concept. All these ETFs are saved monthly and all pay out dividends.

My first old portfolio naturally still contains residual holdings. These have been converted into distributing ones where appropriate and are shown in detail in the $EXXT (-0,34 %) , $ZPRG (-0,05 %) , $ISPA (-0,08 %) , $SPYW (-0,29 %) , $SPYD (-0,1 %) . The portfolio volume is in the four-digit range. The $ZPRG (-0,05 %) is saved. Further cashback flows into one-off savings plans, which replenish one of the other positions. The core task of this portfolio is to generate cash flow, so share price growth is less important to me. I am currently reinvesting the distributions. I could also imagine diverting this as a boost to my nest egg, as a kind of "inflation compensation". It's good that you can set up savings plans and standing orders at the click of a mouse these days, which gives me the flexibility that I base this portfolio on.

My second old custody account used to be the main custody account for the shares, which have long since been with a neobroker and are saved there. I bought two new ETFs here in May, which I also save a small amount of money in each month. They are the $FGEQ (-0,04 %) and $TDIV (-0,03 %) . Here I have the same idea as above. Simply generate cash flow that is reinvested but can be used in other ways if necessary, e.g. to contribute to my fixed cost lump sum.

I can certainly simplify my ETF portfolios considerably and close the old portfolios completely. But I don't want to and won't do that. It's a great feeling when money rains down from the sky every month on all banks/brokers. I want to retain the flexibility of multiple brokers so that I can react quickly if a broker cancels my contract (for whatever reason). In addition, operating this infrastructure does not cost me any fees.

➡️ Distributions

I received 21 distributions on 10 payout days in May. This time, the German values also fell $SAP (-0,04 %) and $DHL (-0,3 %) to book. May was strong in terms of dividends and was almost on a par with June last year. With the past month, I am already well above the dividend that I expect on average according to my planning.

Outlook: According to my forecast thanks to GQ, June 2024 will eclipse everything by far. Depending on the distributions in the fall, I may be able to increase the size of my planned dividend reinvestment. That puts me in a good mood!

➡️ Cashback

I found a few returnable bottles and cans along the way while hiking and on the way home. Especially on men's day. Without me actively looking for them. The deposit was taken away these days. I may invest the proceeds once again in $SOL (-0,32 %) invest it again.

I haven't redeemed any Payback points this month, but I have been busy collecting them.

➡️ P2P loans

With the exception of Bondora Go&Grow, the interest and redemption stream has now dried up on all platforms. EstateGuru also abruptly introduced a new price list at the end of the month, to the detriment of us investors of course. I didn't like this and it only confirms my intention to exit this asset class. There will be news here next month.

➡️ Crypto

It's a case of wait and see. There is no other way to describe the situation. A look at the $BTC (-0,01 %) -price shows the sideways movement and resistance at USD 71K. We must remain patient.

➡️ Outlook

The tax refund is on its way and will be invested. Part of it will even be donated. You'll find out what next month. I might also introduce you to a great project that is definitely worth donating to.

My parents are close to retirement (2 years) and have a larger amount free to invest about 200 k€.

They would like to improve their small pension through dividends / interest.

My approach would be:

40 % ETF:

70 % $SPYD (-0,1 %)

20 % $SPYW (-0,29 %)

10 % $IAPD (+0 %)

40 % Individual shares (dividend growth)

$SHW (-0,85 %)

$XOM (+0,42 %)

$CAH (-0,36 %)

$AD (-0,31 %)

a.o.

20 % Security:

10 % Cash

10 % Call money

Steadily increasing dividends and not too much risk are important.

I look forward to your suggestions 🙌😉

Hi guys, what do you think about dividend ETF's such as the $SPYW (-0,29 %) ?

I have a relatively high proportion of NA in my portfolio and would like to polish up the proportion of Europe with dividend stocks. I could of course also buy individual stocks but then I would have to take care of the selection myself.

Yes I know, single stocks can be more exciting than an ETF but we all know that on average they do not perform badly.

Do you have experience with this question?