Dividends, on aggregate, tend to be sticky. But (as we know) for an investor they are irrelevant, you eat total return, the way you get it is much less important.
Funny enough I too need this. My brain doesn‘t care about the general YTD being +18% or so, but about the 1.56% dividends. That‘s why I lean towards VWRL (vs FWRA), even if the performance is a tad lower. Dividends feel like my money is doing something, and I can do something with it (reinvest it).
In that sense, you might want to consider WEBG. It also pays dividends. And is cheaper than all UCITS ETFs focussed on Global exposure
Thanks! Sadly WEBG is EUR/GBP. I invest with IBKR (VT) and Swissquote, in Swissquote I want to avoid any exchange fees because it’s sooo expensive haha.
Got it
I have same issue and hence I use following
VT (USD) / WEBG (EUR) on IBKR
SPDR ACWI (CHF) on Swissquote
I know SPDR ACWI is not distributing but I don’t like the trouble of reinvesting USD dividends in SQ because additional trading costs for small amounts
In that case I guess VWRL is best for you as there are not many distributing ETFs on SIX.
Thank you
May I ask: Why do you invest into WEBG (compared to VT) even though it’s from Ireland? Do you like the index more (e.g. missing small caps)?
(Sorry, I don’t want to hijak the thread. Ok I discovered the UCITS-Thread - never mind.)
Maybe the link below would be more informative
The main reason is that I don’t want to have US domiciled ETFs but I was reluctant to move away due to costs. Hence most of my positions are in VT. But now we do have reasonable options so I am slowly building NEW positions using WEBG
I also have a monkey brain. And it likes when there is some more cash on the account. Especially CHF that I can directly use to buy food.
It‘s also another thing: I look at the number in positions, e.g 100 VT. This number is/feels stable compared to price/NAV etc.
I thought about buying something stupid like JEPI, having around 0.5% yield/month, so I could buy VT every month with it. I know that it‘s dumb, but it feels more like „progress“, the number of positions going up in contrast to the price which fluctuates (even while having a good year right now).
(Also JEPI was historically a bit less volatile than VT.)
What I do is use dividends thrown up by VWRL, IUSA, FUSD to buy BRK.B. I get the concept of progress though and my monkey brain is wired the same.
Edit: fundamentally, my issue is lack of trust in the process, needing psychological reinforcement.
Exactly!
I want these VWRL dividends monthly as monthly reminder that „it‘s working“.
On the volatility of dividends, note that the past 60 years have been way less volatile than the years before it. Consider e.g. Should we preserve our capital and only consume the dividends in retirement? - SWR Series Part 40 - Early Retirement Now ( How volatile was the dividend income?) for the S&P 500.
As usual the question is “what if it is different going forward and will we get back to earlier behavior”. I see a decent hypothesis in the emergence of buybacks since the 1980s, potentially meaning the more volatile part of earnings gets used for buybacks instead of dividends these days. But no strong conviction on either side.
(If you look at the underlying CAPE Shiller data, I found it striking how volatile earnings have been over the years around crashes. In a world where dividends mostly follow earnings it is therefore not a given that dividends are less volatile.)
The linked article is an interesting analysis in theory, but I feel its premise is flawed … as in practice I don’t know anyone who wants to live off the dividends produced by the S&P 500 – you’d need to invest close to 8 figures to make, say, 100k.
If you can live off 100k and possess close to 8 figures you can IMO go straight to inflation protected government bonds (CHF hedged if you care) and live off “cash” unless you expect to live more than another 100 years or so.
Almost everyone I know who lives or wants to live off dividends pursues a mix of a dividend and a dividend growth strategy. Those who care / have the time put together a carefully selected and well diversified portfolio of companies with a long history of maintaining or growing their dividends (like e.g. I do).