1Mo·

Long-term ETF strategy

Dear Community,

I am 25 years old and have been in the world of investing since 2022. I restructured my portfolio 1.5 years ago and opted for the $VWCE (+1,99 %) with a 70% savings rate, the $GGRP (+1,76 %) and the $FGEQ (+2,15 %) each with a 15% savings rate. My goal is to save for retirement. At the moment I'm still studying and therefore can't invest large sums yet, but I still want to have a fixed strategy and keep feeding it as soon as I earn money and let it run until I retire. Lately I've been doing some more thinking and research and I'm generally satisfied. I know the ETFs have overlaps, but they complement each other to some extent, e.g. through a higher weighting of consumer staples stocks, which are weighted lower in the $VWCE (+1,99 %) This is also reflected in a slightly better performance in the current market phase.

As I like dividend distributions but still don't want to lose out on share price performance, these ETFs have proven to be the right choice. As I would like to build up a monthly cash flow in addition to solid share price growth, especially for the future, which will pay for my Netflix subscription now and perhaps even my rent in the future, I am considering adding the $TDIV (+0,35 %) to include in my portfolio. This would allow me to significantly reduce the US share again and diversify the sectors a little more. In addition, with the 3 distributing ETFs I would have a monthly payout, which I personally like - especially psychologically.

What do you think of this portfolio with the 4 ETFs $VWCE (+1,99 %)
$GGRP (+1,76 %)
$FGEQ (+2,15 %)
$TDIV (+0,35 %) with a 70-10-10-10 weighting for a holding period of 30+ years?

I look forward to your advice.

Many thanks and best regards from Mexico City.

10 Commentaires

Tobias@TaubeSmash

1Mo

What you can see right now is that $TDIV runs counter-cyclically to the US indices due to its country/sector allocation. In addition to the advantages mentioned, such as dividend yield and country diversification, a reduced portfolio vola would also be a reason to include it. I've had it for 1.5 years and am very happy about its inclusion

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Novius@Novius

1Mo

Starting early and sticking with it consistently for a long time is the best thing of all. "Dist" funds (which pay out distributions) generally cost performance compared to "Acc" funds (which invest distributions). But, if it's good for your psyche and your wallet ... 😉 Some might point out that crypto is missing, but not me. Keep up the good work 👍🏽

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Variuzoo@Variuzoo

1Mo

I forgot to mention that over time I will also add some crypto and possibly precious metals as further diversification. Thank you! 😊

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Julian@MoneyISnotREAL

1Mo

How does the taxation of $TDIV work here in Germany, since it is listed in the Netherlands?

Otherwise, I think your reasoning is good. Acc/Dist have only a marginal difference in the overall performance, as long as the dividends are reinvested (I personally also have Dist. ETFs).

VanEck is very heavy on financials, healthcare and energy.
In combination with the other ETFs, you certainly have a good addition.

I'm just putting the thought out there: do you plan to actively rebalance as soon as the ETFs diverge from your weighting and you can't compensate with the savings rate?

I wouldn't make it too complicated myself and you need to feel comfortable with it. 👍

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Variuzoo@Variuzoo

1Mo

@MoneyISnotREAL That's a very good question about taxation. I would have to find out more about that. I don't think active rebalancing is necessary, just possibly suspending the savings plan to adjust the weighting again.

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Aristide H.@AristideHalbseid

1Sem.

@Variuzoo @MoneyISnotREAL You pay 15% withholding tax via broker because of the domicile Netherlands, BUT if you have _already_ exhausted your tax-free allowance, the withholding tax already paid will be credited against your capital gains tax under the double taxation agreement between DE and NL, so that you have to pay less capital gains tax.
This is not tax advice, just the result of my research via the web, reddit and perplexity.ai for example:

https://community.comdirect.de/t5/wertpapiere-anlage/rosinenpicker-tipps-19-wisdomtree-global-developed-quality/td-p/237988/page/3

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Femke@femkelbn

1Mo

I like the idea, my portfolio looks almost exactly the same! ☺️ Except that instead of $VWCE I have also taken the distributing variant ($VWRL with 40 %) and have also included $JEGP (10 %). To include a few other asset classes, I also have gold ($EWG2) with 10% and Bitcoin ($BTC) with 10%.

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Kai P.@DrummerMC

1Mo

In my opinion, it looks sensible and is also largely in line with my own portfolio logic. Is the emerging markets portion in the FTSE enough for you? Otherwise you could add a msci em imi if necessary :)

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Variuzoo@Variuzoo

1Mo

That's a good idea, I'll have a look! Thank you :)

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Stuttgarter81@Moneymoney

4Sem.

The first two ETFs are similar to the all world ETF - only with a higher TER. Extreme weighting in US equities. Best regards 🖖

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