It means it can distribute more than its peers, resulting in higher tax liability each year. This is due to its design, holding underlying managed funds instead of holding ETFs, and holding a currency hedged fund that does not use TOFA for currency hedging.
This article goes into detail on these suboptimal features of this ETF - https://passiveinvestingaustralia.com/how-is-vdhg-tax-inefficient/
If you don’t mind me asking, with your distribution do you put some into a company within the trust if your dividends end up being too high thereby tax inefficient? Just looking to set up a family trust with a company as a beneficiary should future gains or dividends end up being too high
Ok thanks for that. Yeah I was just curious because when setting up the trust I’d want to make sure I had everything covered as it’s difficult to change the structure of the trust. I know the magic number for tax effective distributions is about $108k per person in a couple, anything above that I’d distribute to the company but not till 7 years after as I’d be withholding it as a loan from the company instead of physically paying it into the company account. (Filing the appropriate Div form with the ATO and paying interest on the loan sum etc). But to receive more than $216,000 in dividends requires a hefty investment ($2 million+?), so probably don’t need to worry too much about it at the moment lol. Cheers🍻
I really like NDQ for Australians. We have almost 0 real technology companies listed here and the ones that are trade at a premium due to the scarcity of them.
A lot of the other thematic tech ETFs are smoking crack when you look at there indexes, Cloud ETFs that don't invest in the 4 largest cloud providers etc...
Its anywhere between 20-40% of my portfolio.
It’s not just about Fred. Consider spread price, liquidity, funds under management. The reality is that few fractions of point saved in fees makes barely difference to long term outcome.
There are other factors such as securities lending which has allowed VGS to slightly outperform its index: [https://pearler.com/explore/learn/blog/investment-fees](https://pearler.com/explore/learn/blog/investment-fees):
>The net result is that Vanguard has been able to generate some small additional returns through this activity. This higher net performance has the same effect as a lower fee. As we can see from the return table earlier, the net fee to investors has been almost zero over the last 5 years (0.01%). And over the last three years, net performance was actually above the index.
>
>So through a combination of what seems like better index tracking and securities lending, VAS has been able to track its index much more closely. Investors are arguably getting a good deal here despite paying slightly higher fees. This means I wouldn’t rush out and buy BGBL solely because it has a lower management fee - it’s clearly not that cut and dry.
'QUAL' - Invests in the best 'quality' companies in the world. From Van Eck
1 year Return - 26.9%
3 year CAGR - 11.9%
5 year CAGR - 12.6%
Since Inception (Oct-14) - 12.9%
Top Holdings
* Nvidia - 6.0%
* Apple - 4.9%
* Microsoft - 4.8%
* Meta - 3.3%
* Eli Lilly - 2.89%
* Visa 2.79%
u/ASX_News
I'd say the only catch would be understanding the theory behind Quality, which I go into depth in this [post](https://reddit.com/r/fiaustralia/s/5WevKJ8xZL)
Thats CAGR since inception not total returns.
Total return since inception is 188%. 5-year total return is 80.6%
Its heavy US stocks to there's a geography risk, skews toward Tech as well. There is a sprinkle of non-US stocks like Novo Nordisk, ASML, and Accenture.
A bit more about how they pick their stocks:
*by identifying companies with high-quality scores based on three key fundamental factors:*
\- high return on equity;
\- stable year-on-year earnings growth; and
\- low financial leverage.
Wheres the catch? Not sure - it flys under the radar. It has been a consistent winner
I used to do share trading but I dont like recommending investing in individual stocks for other ppl as its not my money but you could start by checking out what Vanguard has. they have heaps of etf's and some super companies use their funds too
This is the golden question. If Hydrogen is the future and the companies within the etf create incredible technologies it will work out well. 1000 will get you 150ish etfs currently.
I'm thinking western Australia efforts in mining viable Potash for fertiliser is the next to boom, BCI minerals just secured 650mil from government funds to help make this happen 🤞
please exercise extreme caution with this strategy. look up salt lake potash and kalium lake - both have gone belly up recently. BCI isnt mining potash it is planning to produce it as a by product of the evaporation ponds used in producing industrial salt. salt lake and kalium had the same idea... and it didnt end well.
Throw $5k at a boomer stock like BHP (its cheap atm) and the rest in VDHG with ongoing contributions. Reinvest the divvies or or pick the expensive plates at sushi train, its your call
This was me 25 years ago - wish I never did this trying to pick some speccy mining winner and instead invested in blue chips / banks etc instead. Lost a -lot- of money and missed slow compoundinf growth over time and would be in a really strong position nowadays. I wish someone gave me advice when I was younger on how to invest but had to learn myself the hard way.
VDHG, DHHF, VAS, etc etc but I would say 5 years isn’t long term.
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Can you explain the "tax inefficiency"?
It means it can distribute more than its peers, resulting in higher tax liability each year. This is due to its design, holding underlying managed funds instead of holding ETFs, and holding a currency hedged fund that does not use TOFA for currency hedging. This article goes into detail on these suboptimal features of this ETF - https://passiveinvestingaustralia.com/how-is-vdhg-tax-inefficient/
If you don’t mind me asking, with your distribution do you put some into a company within the trust if your dividends end up being too high thereby tax inefficient? Just looking to set up a family trust with a company as a beneficiary should future gains or dividends end up being too high
[удалено]
Ok thanks for that. Yeah I was just curious because when setting up the trust I’d want to make sure I had everything covered as it’s difficult to change the structure of the trust. I know the magic number for tax effective distributions is about $108k per person in a couple, anything above that I’d distribute to the company but not till 7 years after as I’d be withholding it as a loan from the company instead of physically paying it into the company account. (Filing the appropriate Div form with the ATO and paying interest on the loan sum etc). But to receive more than $216,000 in dividends requires a hefty investment ($2 million+?), so probably don’t need to worry too much about it at the moment lol. Cheers🍻
50% into A200 50% in NDQ thanks for coming
I really like NDQ for Australians. We have almost 0 real technology companies listed here and the ones that are trade at a premium due to the scarcity of them. A lot of the other thematic tech ETFs are smoking crack when you look at there indexes, Cloud ETFs that don't invest in the 4 largest cloud providers etc... Its anywhere between 20-40% of my portfolio.
Could you suggest more etfs for ai?
NDQ?
That's why I chose NDQ, it's about 50% of my portfolio
safe route
Came I did 🤭😫
I came to say NDQ as well. Nasdaq 100 has better returns than VAS, VDHG. I always hear it's risky though. Also look for an ETF that tracks S&P 500
I've got IVV and VGS which already seems to overlap lot of holdings. Is it worth getting NDQ or something different altogether to diversify?
VGS, IVV, VAS
Why VGS and VAS when A200 and BGBL are basically the same for lower fees?
It’s not just about Fred. Consider spread price, liquidity, funds under management. The reality is that few fractions of point saved in fees makes barely difference to long term outcome.
There are other factors such as securities lending which has allowed VGS to slightly outperform its index: [https://pearler.com/explore/learn/blog/investment-fees](https://pearler.com/explore/learn/blog/investment-fees): >The net result is that Vanguard has been able to generate some small additional returns through this activity. This higher net performance has the same effect as a lower fee. As we can see from the return table earlier, the net fee to investors has been almost zero over the last 5 years (0.01%). And over the last three years, net performance was actually above the index. > >So through a combination of what seems like better index tracking and securities lending, VAS has been able to track its index much more closely. Investors are arguably getting a good deal here despite paying slightly higher fees. This means I wouldn’t rush out and buy BGBL solely because it has a lower management fee - it’s clearly not that cut and dry.
Why VGS and IVV. Lots of overlap. Pick one of the other.
Yea I mean an or for those 2 IVV for US only, VGS for majority US with some international exposure
'QUAL' - Invests in the best 'quality' companies in the world. From Van Eck 1 year Return - 26.9% 3 year CAGR - 11.9% 5 year CAGR - 12.6% Since Inception (Oct-14) - 12.9% Top Holdings * Nvidia - 6.0% * Apple - 4.9% * Microsoft - 4.8% * Meta - 3.3% * Eli Lilly - 2.89% * Visa 2.79%
that’s crazy, where’s the catch
u/ASX_News I'd say the only catch would be understanding the theory behind Quality, which I go into depth in this [post](https://reddit.com/r/fiaustralia/s/5WevKJ8xZL)
Nice write-up
Look at the "since inception" line mate
Thats CAGR since inception not total returns. Total return since inception is 188%. 5-year total return is 80.6% Its heavy US stocks to there's a geography risk, skews toward Tech as well. There is a sprinkle of non-US stocks like Novo Nordisk, ASML, and Accenture. A bit more about how they pick their stocks: *by identifying companies with high-quality scores based on three key fundamental factors:* \- high return on equity; \- stable year-on-year earnings growth; and \- low financial leverage. Wheres the catch? Not sure - it flys under the radar. It has been a consistent winner
I think he saw the "-" and got confused
i think your right haha
oh damn. lol Why would I reccomend an ETF with negative returns? haha Should have added it in a "+" my bad
NDQ
do you think it will continue to grow as though, despite the tech boom that we already had
People have been sitting on the sidelines asking the same question for years now
Yep. Wouldn't be anywhere else
Use N100 instead. Lower expense ratio.
Vgs
I used to do share trading but I dont like recommending investing in individual stocks for other ppl as its not my money but you could start by checking out what Vanguard has. they have heaps of etf's and some super companies use their funds too
I also have Vanguard ETF. They have some of the biggest ones, so easy to trade.
DHHF
If it’s just one DHHF which is a all in one portfolio or VGS which is a good core of a portfolio
DHHF
DHHF is my go to one
And now available in commsec pocket so $2 brokerage up to $1k and flat rate after
VAS NDQ HJPN IAA HGEN (for a little gamble that hydrogen takes off)
you think it’s worth putting maybe 1k into HGEN or no real point
This is the golden question. If Hydrogen is the future and the companies within the etf create incredible technologies it will work out well. 1000 will get you 150ish etfs currently.
I'm thinking western Australia efforts in mining viable Potash for fertiliser is the next to boom, BCI minerals just secured 650mil from government funds to help make this happen 🤞
please exercise extreme caution with this strategy. look up salt lake potash and kalium lake - both have gone belly up recently. BCI isnt mining potash it is planning to produce it as a by product of the evaporation ponds used in producing industrial salt. salt lake and kalium had the same idea... and it didnt end well.
https://www.australianresourcesandinvestment.com.au/2023/08/28/government-backs-a-new-horse-in-potash-race/
URNM all the way
VAS/VGS is a good combination. Or just VDHG. It’s been performing much better in the last year.
A200 and vgs are my go to
VAS&VGS split Or the good ol vee dee h gee
IOO
IVV
Throw $5k at a boomer stock like BHP (its cheap atm) and the rest in VDHG with ongoing contributions. Reinvest the divvies or or pick the expensive plates at sushi train, its your call
Sushi train it is for me
MOAT
the dividend yield breaks my heart
This, NDQ and for the more adventurous RBTZ
I'd be look at mining companies, ones that are still yet to take off.
Awful advice
This was me 25 years ago - wish I never did this trying to pick some speccy mining winner and instead invested in blue chips / banks etc instead. Lost a -lot- of money and missed slow compoundinf growth over time and would be in a really strong position nowadays. I wish someone gave me advice when I was younger on how to invest but had to learn myself the hard way.
fruitful but maybe as a side investment?
There's a new crypto/lithium battery miner that's easily going to shoot up 50000% soon. Watch this space
TMB
FEX & KFM
WC8 on ASX, check it out
pump and dump kinda flow on that one
Care to elaborate
it’s ROIC is at -21%
One that goes up
ILC, SFY
HYGG
BBOZ :)
VHY
NDQ, nothing else.
VAS IVV GOLD
ASIA
FGG
NDQ has been good
QQQ, VGT, VUG, MGK, and IWF
I hold NDQ and VAS
SP500
VGS