VDHG, high growth ?!

Is VDHG high growth or high yield, its paying 6.47% dividend yield ?

 

literally google VDHG

 

Plus

Search Results for Query: VDHG - PropertyChat

 

It had a high distribution recently for a few reasons. Mostly caused by the volatility in the market.
Two of the main ones are:
1) Capital distribution from re-balancing.
2) Part of the portfolio is hedged and we had large currency swings. The currency hedging gain is paid out as distribution.

 

As mentioned, VDHG follows an index. When that index changes as much as it did last year they have to sell or buy to maintain tracking. If they sell something they bought cheaper, it triggers capital gains.

Likewise when they have foreign exchange gains as has happened this year, they have to pay that out. Check out the distribution for VGAD this year compared to last.

Historically the managed fund in particular has always paid quite chunky distributions. 5.5% over the past five years according to Sharesight.

Of course these are not dividends apart from some of the Australian portion so you're up for capital gains.

 

VDHG listed in Nov 2017

Since then



Last 2 years




Last year

 

ASX300 last year

Last 2 years

 

Or last year

 

A great read here

VDHG or roll your own - Passive Investing Australia

 

Everything comes down to the time period selected.

 

@sfdoddsy sharesight has its limits when comparing

I'm a fan of VDHG overall though, and (blasphemy) I like the 10% bonds for rebalancing

Are you using wholesale funds?

 

Unfortunately VDHG is internally made up of wholesale funds which means other investors selling can trigger capital gains for all

DHHF has a number of improvements on VDHG including being made up of underlying ETFs

DHHF and other VDHG alternatives - Passive Investing Australia

 

Some guy did some calculations here on tax drag

 

@Redwing

I have the wholesale fund (VAN0111) rather than VDHG.

The 1st quarter distribution will be interesting.

VDHG has just announced a 4% dividend just for the quarter. Making it 10% for the past 12 months. And the July distribution is normally the largest so I reckon 12% for the full financial year.

The wholesale fund usually pays out significantly more than the ETF so I'll be very curious to see how that ends up.

It's obviously mostly due to turnover within the fund, but the original poster's question seems to have been answered.

This year, at least, VDHG is high yield.

 

I am a 30-something, and pondering if i should buy VDHG.

I currently own VAS + VGS in a 60/40 split. Considering VDHG's tax drag, am I right in saying it would NOT be a sensible option for me to invest in it as I rise up in the tax bracket (impending pay rise)?

VAS+VGS offers good enough diversifcation (minus Bonds), so I might not missing out on much. I should look VDHG's high yield with a pinch of salt. If sharesight says VDHG's dividend return is say 5% or 6%, the actual take home yield % is much lower depending on one's tax bracket. Or am I over simplifying here?

TIA

 

The main advantage of VDHG (IMO) is that it automatically does everything for you. You dont need to think about currency fluctuations, asset allocation etc. you just buy the same ETF each month/quarter whatever.

VDHG wasn't around when I started so I am VAS/ARG + VGS/VAE 60/40 split.

So long as I just follow my asset allocation, it shouldn't matter.

If I was starting again today I would find it very hard to not just buy VDHG. its so simple.

 

If you like the diversity and convenience of VDHG but not keen on the distributions, perhaps consider something like DHHF?

 

@BNE , when you say "not keen on distributions", do you mean the CGT / tax drag that comes with the VDHG dividend?

 

Yes, for that reason I tend to prefer DHHF

 

Is the tax drag you guys are referring to reflected in the percentage of franking credits? So, a lower franking percentage indicates that the dividend is made up of more capital gains due to rebalancing?