I have a question regarding buying ETH Distributiv (cash-out of dividend) or Thesaurierend (dividend will be invested automatically):
- In theory, ETF based on “Distributiv” have a bader course development (because the dividend payment is calculated into the course)
- vice versa, ETF based on “Thesaurierend” have a better course development
With oulook to the strategy of a long-term increasing portfolio value the theorie says that the ETF based “Thesaurierend” will be the better variant.
In the “Mustachian” article:
it is stated that it should be “easier” for the tax. OK that’s wright in termin when the ETF is not listed at the Swiss Government. But under normal circumstances the ETF is known and listed in the Swiss Tax Goverment and “if not”, then it is up to you to declare it manually. It is also possible to send an e-Mail to the Swiss government to add the missing ETF.
==> So the TAX-issue should not be an issue to choose this strategy?
- If i choose ETF “Distributiv” this means i have to “reinvest” manually into the ETF after i receive the dividend in cash - this generates additional costs for buying new ETF’s (logically)
- What is with ETF “Thesaurierend”: With the dividend the ETF company buys automatically new ETF’s for myself? AND: this should not generate costs at for example “Swissquote”?
Therefore for a longterm “Buy-and-hold” strategy i tend to choose the option “Thesaurierend” until I get into the years of “pension”. For genereting a “passive income” I have then to reeinvest my portfolio to “Distributiv” for getting cash-out of my investments. Because the course development of “Thesaurirend” ETF is better than “Distributiv” i will generate a higher ROI when i sell (a part) of my ETF and sell “Thesaurierend” ETH for generating passive invome for my “Pension time”.
Any thoughts and experience in this theory/questions warmly welcome.