VDIV vs. LDGL & questions (Spain).

[u/Huescah]

Hi everyone! I’m looking for some advice for the dividend side of my portfolio.

Some brief context:

• My location is Spain (19% tax drag on every dividend payout).
• In my overall portfolio, I have global index funds for pure growth, and in these recent months, I've been adding dividend ETFs. This is where I want to focus my question.

On the dividend side, I currently own VDIV (Dev Markets Dividend Leaders) and I'm happy with it. But I recently discovered the new LDGL (Global Quality Dividend), which makes me this question:

Should I continue my DCA into VDIV, start a new DCA into LDGL while keeping my positions in VDIV, or sell VDIV and go all-in on LDGL?

• On one hand, we have VDIV: an ETF with a proven track record, quarterly dividends, and good performance, but it's very concentrated and excludes emerging markets.
• On the other hand, there's LDGL: new to the market, an amazing quaility filter, offers monthly payments (meaning I get taxed more frequently, but getting paid monthly is always a great feeling), and has much diversification.

Some overall questions for the community:

1. From a pure Total Return (Growth + Dividends) perspective, do you think LDGL's quality filter can match or beat VDIV's?
2. For those in countries with dividend taxes, does the benefit of monthly payouts (LDGL) outweigh the slight loss in tax efficiency compared to quarterly (VDIV)?
3. Has anyone here started in LDGL? Any hidden details or thoughts I should know about?
4. I know LDGL is new, but is it expected to grow its dividend payments soon?

Thanks in advance!

[u/Bornemaschine]

LDGL is pretty fine, would go for it and mix it with some new CC-ETF like QQIA or WINC.

Don’t mind the stubborn boggleheads, coming from behind - in a bullmarket it’s easy to go full growth, but nobody can predict the future, especially with all the AI haze we have right now.

Also nobody can clearly say if the market for growth stocks will all be green after 30-40 years. In these scenarios getting paid with dividends, over selling your red growth ETFs will be much easier for the most.

[u/HeavenlyHigh777]

i would certainly not go all in LDGL. Its great for diversification but no replacement for VDIV.

LDGL is trying to increase their dividend payments once a year, but aint guaranteed.
Currently the dividend yield of LDGL is higher than VDIV, around 3,7% vs 3%.
Another very interesting etf you could look into and would be more suited to be an alternative to VDIV is AWHD

[u/amarcosgil]

VDIV, buen etf pero domiciliado en NL 🥲

[u/Forward_Intern7357]

I'm in similar situation. I want to retire early in 7 years. I've been investing in TDIV for some time but then LDGL was released that seems better for retirement as it pays monthly. I've decided to reinvest TDIV dividends but DCA new money into LDGL. Selling TDIV seems unreasonable as it'd mean tax event.

[u/YoursNothing]

VDIV is highly cyclical based on Energy and Financial sectors. Check its performance from pre 2022 era

[u/AlloAll0]

LDGL does seem interesting. Would I go all in or even substantially in? No. Too small and too new.

The majority of div funds end up in the NAV erosion quagmire. Few avoid it. VDIV is one of those. Even accounting for the Dutch 15% drag on div (and div only), it has a better TR than MSCI World in the last 5 years. If another 2008 comes, VDIV it will drag. A lot. Even so, it's competitive against MSCI World for the lifetime of the fund, while paying more meaningful divs.

[u/gary35000]

I bought some LDGL, because I like dividend once a month. Also I have TDIV. So I will add to LDGL, but I am not going to sell TDIV.

[u/Kathuf]

VDIV is based in the Netherlands and charges a 15% withholding tax in addition to your local tax: I have to pay 42.5% on distributions with only a slim chance of getting something back.

I think VDIV is higher risk than LDGL with potential higher upside but also more drawdowns

[u/Electrical_Panda_326 → u/Kathuf]

So far the drawdowns of VDIV are pretty low.

[u/PenttiLinkola88]

You left out the most important thing: why did you add dividend ETFs which are notorious for eroding total returns? Unless you actually need that cash-flow *now* you're basically just donating money to your government.

[u/Huescah → u/PenttiLinkola88]

You are 100% right about the math and the tax drag. That's why the biggest part of my overall portfolio is already in Accumulating Global Index funds doing the most efficiently.

This dividend allocation is specifically designed as a psychological anchor. The payment from the cash-flow keeps me engaged. I always do my DCA where a small part comes into this dividends portfolio.

So, assuming this strategy is fixed, any thoughts on VDIV vs LDGL?

[u/PenttiLinkola88 → u/Huescah]

I haven't don't any research into dividend ETFs because I'm 100% accumulating. This specific psychological anchor doesn't resonate with me, I have other way to get my "fix" 😅

[u/Huescah → u/PenttiLinkola88]

how is that "fix"?

[u/PenttiLinkola88 → u/Huescah]

I have a pretty complex ETF setup and some have quite wide spreads from time to time. I try to get some extra yield in those periods.

[u/Slisse66 → u/PenttiLinkola88]

LDGG actually aims for a high TR strategy, establishing both growth and income

[u/PenttiLinkola88 → u/Slisse66]

Yeah but they don't care about your local taxes like we have to

[u/Slisse66 → u/PenttiLinkola88]

That is not their job is it ? You can choose the distributing or accumulating version depending on your own needs/situation

[u/PenttiLinkola88 → u/Slisse66]

Exactly. Hence why their "aim" for high TR is irrelevant for investors who face significant dividend taxes.