Advantages
Simple - An ETF is usually sufficient here.
Cash flow - The regular income from your investment is higher.
Cheap - As with the all-in-one variant, the costs remain manageable.
Time - No rebalancing is required to restore an ideal weighting.
Disadvantages
Diversification - Due to the focus on high dividends, the number of stocks invested in decreases.
Total return - The total return is usually slightly lower than with a simple world ETF.
Exposure - Slight regional cluster risks, and in particular in the financial sector.
Sustainability - Is often non-existent for dividend ETFs. High payouts often come from "outlaw" industries such as tobacco, oil and mining.
Difficulty | ⬤ |
Costs | ⬤ |
Security | ⬤⬤⬤ |
Individuality | ⬤⬤ |
Maximizing cash flow
Dividend is king, with performance and diversification taking a second role.
Dividend hunter
Suitable for investors who aim to be able to live off the earnings of the ETF in the long-term.
Option 1 - High cash flow
Product: iShares STOXX GlobalSelect Dividend 100 UCITS ETF
ISIN: DE000A0F5UH1
TER: 0.46%
Payout ratio: 5.1%
Income Use: Distributing
Fund volume: 2.15 billion
Positions: 146
Currency: EUR
Inception date: 09/25/2009
Sustainable (ESG)? No
The fund invests worldwide. The top 10 holdings own a share of 20%. Europe is the most heavily weighted region at 35%.
Alternative: There is an accumulating variant available. ISIN: IE00BK5BQT80
Option 2 - Worldwide spread
Product: Vanguard FTSE All-World High Dividend Yield UCITS ETF (Dist)
ISIN: IE00B8GKDB10
TER: 0.29%
Payout ratio: 3.7%
Income Use: Distributing
Fund volume: 3.6 billion
Positions: 1843
Currency: USD
Inception date: 05/21/2013
Sustainable (ESG)? No
The fund invests worldwide. The top 10 holdings own a share of 13.1%. The USA is the most heavily weighted region at 50%.
Tip: This fund is suitable as a replacement for the MSCI World ETF in our Global Balance portfolio in order to achieve a higher cash flow there.
Disclaimer
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