1Semana·

Accumulation VS Distribution

Everybody is telling me that ACC always wins over DIS on the total return, but I have created 2 test portfolios here in Getquin with the following parameters:

Capital: 350.000 euro

Investing date: 01/01/2022

one portfolio containing only $VWCE (-0,92%) and the other only $VWRL (-0,91%)

To keep it simple:

I didn't reinvest any dividend = Disadvantage for VWRL
I didn't calculate any dividend tax = Advantage for VWRL (still not everybody has to pay dividend tax)

The screenshot clearly shows a win for the VWRL-distributing version.

How do you explain that?

10 Comentários

Hebel-Horst@DoppelSchlechtMinus

1Semana

Both ETFs perform identically. The advantages and disadvantages depend only on how you use them.
When you run such simulations, keep in mind that Getquin does not provide the exact price for past entry points, but only a random closing price from around that point in time. That might well be the sole reason for the slight difference.

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madtao@madtao

1Semana

@DoppelSchlechtMinus i have tryed to pull the date 5yerara back and inseted the price manually from more reliable source and in fact the total rerun on 5 years time is practlally identical, so i was wrong

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madtao@madtao

1Semana

@madtao still if I reinvest the dividend the total retun on distribuition will be higher

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Hebel-Horst@DoppelSchlechtMinus

1Semana

@madtao These are not even independent funds, but sub-funds based on the same portfolio.
The only way to outperform the acc version by manually reinvesting the yield from the dist version, is when the stock market just happens to go down in the couple of days between the extraction of the yield from the fund and your reinvestment transaction. Statistically, that happens less often than the opposite.
Then add spread, fees and taxes to your deficit, if applicable.
It is just completely unrealistic to beat the acc version by doing that. And that's coming from a happy owner of the dist version.

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GargaGamble@gargi

1Semana

@madtao you might want to update the original post

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Hebel-Horst@DoppelSchlechtMinus

1Semana

@DoppelSchlechtMinus To be more precise with the wording, these are different share classes of the same fund. For reference, you can see in this document https://fund-docs.vanguard.com/ie00bk5bqt80-en.pdf that "the fund" was issued in 2012 (VWRL) and the "share class" in 2019 (VWCE).

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GargaGamble@gargi

1Semana

Nice experiment, but I don't have a good explanation. Perhaps underlying structure of stocks in the two ETFs performed differently.

Perhaps the more experienced ones can tell us.

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João@joaoluis

1Semana

The fund must pay taxes on the dividends right? So the distributing version gives you the full dividend and you must pay the taxes yourself, that’s why it is more, it is not a net number. This is my guess.

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Hebel-Horst@DoppelSchlechtMinus

1Semana

@joaoluis No, both funds pay the same taxes. You only pay additional taxes on the yield.

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João@joaoluis

1Semana

@DoppelSchlechtMinus Ok, thank you

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