Hi
Looking to buy some ETFs. I’ve already got VHY and they are giving me a good dividend return which I’m reinvesting. Rather than keep putting into VHY are there any other low cost decent returning ETFs I should be considering?
Thank you 🙏🏼
Suggestions for High Returning ETF Dividends
shertiger on 25/05/2023 - 12:06
Comments
Curious on the answers, I have some lazy USD in a brokerage account that needs to be safely put to work.
What ETF's are the community using to track and hold the short term treasuries?
Some sort of custodian accounts would be a plus - no point buying a treasury tracking ETF to find out that there is exposure to other products.
I have VAS, VHY, and VDHG.
VHY and VDHG have both been pretty good, but I hear they make doing your taxes a bit messy.You don't do taxes?
My accountant would get a bit lost when he had to verify all my VDHG trust income each financial year, then add DRP on top of that. I couldn't make heads or tails of it, even with Sharesight providing the numbers I had to plug in to their system. I ended up selling out of it, partly because of this.
I've been DCA'ing into VGS & VAS for the past two years, has been a bit rocky but hopefully will come good once we get past all this recession talks.
What broker
Currently with Stake but started out with Self wealth before they handed me over to Market Tech who were no good.
Are you mixing up Opentrader and Selfwealth? (Can confirm Opentrader -> Markettech was not good).
If you don't mind not having CHESS, you can go with Vanguard AU directly.
Otherwise I use Selfwealth.
Can I ask why Stake and not CMC? I'd have thought the trade fee would make DCA expensive with Stake?
(I'm just in the process of setting up a CMC account and want to ensure I've made the right choice.)It's free for the first 12 months…
https://www.ozbargain.com.au/node/680568
Plus after that is only $3 per trade but even less if someone on here clicks your referral link which actually happened to me yesterday.
ah I see, thanks
Why are you going with high dividend ETF's if you are then reinvesting the dividends? You are paying extra tax for no reason.
Generally you only want dividend ETF's if you need the income to live off.
If you want compounding, you would be better off going with high growth ETF's which pay little dividends (company earnings are reinvested for growth). As such your tax bill will be much smaller. You also don't get taxed on unrealised gains.
You will get better long term returns going with growth focussed ETF's, and then when approaching retirement age you can rebalance some of your portfolio towards higher dividend ETF's to allow you to receive cashflow in retirement.+1 came here to say this
Dividend investing not optimal
Thanks that makes sense but how do I profit from high growth ETFs? Do they go up in price?
Would you recommend any?
Yes, high growth ETF's will go up in price by a lot more than high dividend yielding ETF's (as high dividend yielding ETF's generally pay out most of their earnings, hence their price does not go up by as much).
Australian ETF's are generally higher yielding, so for growth I would look for international markets.
The US market has performed remarkably well over the last 10 years, as most of their companies retain their earning within the company, and reinvest it to grow.
A few suggestions as per below. Check out their price growth compared to VHY.IVV - iShares S&P 500 ETF
https://www.marketindex.com.au/asx/ivvIJH - iShares S&P Midcap ETF
https://www.marketindex.com.au/asx/ijhIJR - iShares S&P Small-Cap ETF
https://www.marketindex.com.au/asx/ijrNDQ - BetaShares NASDAQ 100 ETF
https://www.marketindex.com.au/asx/ndqIXJ - iShares S&P Global Healthcare ETF
https://www.marketindex.com.au/asx/ixjMOAT - VanEck Morningstar Wide Moat ETF
https://www.marketindex.com.au/asx/moatThese are US based only, so they should only make up part of your total portfolio.
There are plenty more ETF's out there as well.I would also look to add a small position in an Indian ETF. With its large, growing population and relatively well educated, it should do well going forward. Its historical performance has also been decent.
IIND - BetaShares India Quality ETF
https://www.marketindex.com.au/asx/iind(Nifty 50)
https://www.google.com/finance/quote/NIFTY_50:INDEXNSE?windo…
If you want some US exposure with yield, that trades on the ASX:
UMAX - BetaShares S&P 500 Yield Maximiser Fund
https://www.marketindex.com.au/asx/umaxIf you want private credit exposure, listed on the ASX, with monthly distributions:
MOT - Metrics Income Opportunities Trust
https://www.marketindex.com.au/asx/mot
I find it strange that you say in your earlier comment that it’s not tax efficient to buy dividend paying ETFs (of which VHY is approx 88% franked on their last payout) yet you recommend MOT which has 0 franking.
What am I missing here?
NBI, GCI and MAAT are also similar but they also have 0% franking.
My comments are not recommendations, only suggestions based on the limited information that the OP has supplied.
I don't recommend MOT for long term returns, however for someone in retirement that is looking for income this would be suitable.
There is generally no such thing as best for all scenarios. I do not know the OP's current situation.
None of these are recommendations, they are options that anyone reading these post may find suitable for their own specific purposes.Also, franking by itself is not a good indication. You need to look at the gross dividend/distribution yield. As an example, a $5 dividend fully franked (100% franked at 30% tax rate) is equivalent to $7.14 gross dividend. So an unfranked dividend that is paying greater than $7.14 is better than the $5 fully franked dividend (and so forth for partially franked dividends).
FANG - i have 0 knowledge - but get it.
Time to get it was few months ago. I got it few months ago and is up 40 percent
Look at HNDQ or IHVV, these are hedged and with AUD being very low could get good returns. Obviously more risky that unhedged
The hedged ETF's can be good depending on what is happening with the exchange rate; Australian dollar (AUD) in comparison to the trading pair - generally the US dollar (USD).
Back in the early 2010's when we had a strong AUD (when AUD$1 could get you more than USD$1), then you do not want to hedge, as the AUD is likely to weaken over time, so any international assets you own will convert to more Australian dollars the more the AUD falls.
However when the AUD is weak (when AUD$1 is approaching USD$0.50), then hedging is a good idea, as over time the AUD is likely to strengthen from these lows.
At the moment with the AUD around USD$0.65, it is slightly weak, but could still go lower.Of course, we can't time the bottom, but fair to say we are closer to bottom than the top
No idea but 80% QUAL and 20% A200
so it depends on what you mean by HIGH RETURN. Generally there are 2 types of gains you can get. You can get something like VGS (vanguard US index) or NDQ (Nasdaq index) where you will get capital gains. If you want more of a dividend based outcome then there is GCAP (Global Capital Securities) & EBND (Emerging market bonds) which pay monthly dividends which can addup quickly as well.
Theoretically you want a good mix of both, 60/40 of the above.
After years of agonising over when to invest in ETFs, I only just dropped 70k on VGS earlier this week. I plan to forget about it for 20 years and then see what happens.
VGS is a good choice. Good diversification into international markets, though it is heavily weighted to the US with 69% weighting.
https://www.vanguard.com.au/adviser/products/en/detail/etf/8…In 20 years time it should have grown to about $400k or so (not adjusted for inflation).
No idea what this mumbo jumbo above is but I put in few K's with Vanguard in some high growth ETF and the money seems to be getting less and less :(
S&P 500 shits all over the ASX. American world domination + tech sector + more chill labour laws + work culture simply can't be touched by Aus companies.
Too bad the FX rate is rather weak right now, so if you cash out in the future, gains could be eroded by a stronger AUD.
Property in Aus is a better investment due to migration rates and tax laws favoring it as a investment vehicle. East coast seems pretty saturated but there are good pickups to be had in Perth.
Yeah, the US has set up their system to attract all the talent, so everywhere else suffers brain drain.
Australia has been good for property investment, so people should look at Australian REIT's:GMG - Goodman Group
https://www.marketindex.com.au/asx/gmgCHC - Charter Hall Group
https://www.marketindex.com.au/asx/chc
No one mentioned DHHF, betashares all in one ETF of ETFs? Mine is still underwater for the last few years.
My ETF that has done the best is IOO.
Beware of A200 it does not track the ASX200 like you'd think tracks the "Solactive Australia 200 Index".
Not sure if the A200 contains Woodside or coal companies..Betashare IIND also tracks the Solactive index but doesn't contain India's biggest public company Reliance!!
You need to look into what ETF contains.
I do like Vanguard rather than Betashare as the former are a mutual fund and their funds are owned by their investors.For dividends I would use VHY but when compared to VAS(tracks ASX200), over the long term, it under-performs because a higher percentage of the dividends are distributed.
D
Side question, what’s your preferred platform? I personally like Stake as the fees are reasonable and it’s got a good UI.
BetaShares A200 has an extremely low management fee of 0.07% last I looked.
I'll be loading up once a decent market pullback occurs, which should be soon.
I currently have VHY and IOZ which I bought when market levels were a good bit higher, but will buy more at, hopefully, much lower prices during a decent pullback.
iShares S&P/ASX Dividend Opportunities IHD with a management fee of 0.3%, is also worth a look
your investments are limited to one country and one type of investment?
why not look at other VG etfs, or blackrock, van ecks, plato maximiser etc, and property trusts and other investment types