If a non resident alien is interested to build a portfolio based on Dividends Stocks (In parallel to his bogglehead total world VWRD/AGGG one), what is the alternative of holding Stocks like XOM, T, and other US dividend stocks that are subject to estate/death ~40% Tax?
Do you recommend any ETF domiciled in Ireland that is tailored for high dividend?
Dividend Stocks without Estate Tax
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Dividend Stocks without Estate Tax
60% VWRD 40% AGGG until further notice
Re: Dividend Stocks without Estate Tax
Hi,michoco911 wrote: ↑Sat Jun 12, 2021 1:13 am If a non resident alien is interested to build a portfolio based on Dividends Stocks (In parallel to his bogglehead total world VWRD/AGGG one), what is the alternative of holding Stocks like XOM, T, and other US dividend stocks that are subject to estate/death ~40% Tax?
Do you recommend any ETF domiciled in Ireland that is tailored for high dividend?
I hold a very large chunk of my portfolio in Vanguard FTSE All-World High Dividend Yield UCITS ETF (USD) - https://www.vanguard.nl/portal/instl/nl ... /?overview
With 1500 positions it has enough positions that I think it should match the performance (although with a value tilt) of the total market. And it has a decently low TER.
The yield normally varies from 3.5 up to 4%. Right now it has a low number on the website because of the lower june 2020 distribution, but I think that the yield will go up when the june 2021 distribution replaces the june 2020 distribution.
I like that the +/-4% yield range because it matches the safe withdrawal rate, you can put your money in and never sell but instead rely on the dividends.
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Re: Dividend Stocks without Estate Tax
Thank You. Appreciate the advise.Schlabba wrote: ↑Sat Jun 12, 2021 6:29 am
Hi,
I hold a very large chunk of my portfolio in Vanguard FTSE All-World High Dividend Yield UCITS ETF (USD) - https://www.vanguard.nl/portal/instl/nl ... /?overview
With 1500 positions it has enough positions that I think it should match the performance (although with a value tilt) of the total market. And it has a decently low TER.
The yield normally varies from 3.5 up to 4%.
60% VWRD 40% AGGG until further notice
Re: Dividend Stocks without Estate Tax
This seems like a dangerous strategy.
- The 4% SWR was calculated to the US situation. Teh SWR for worldwide investments is differently.
- The SWR is typically calculated on a 60/40 and 50/50 portfolio. 100% stocks have less protection in drawdown.
- The total return for funds like VHYL is lower then for the complete stock market.
BeBH65. (only an investment enthusiast, not a financial adviser, perform your due diligence). |
Have a look at https://www.bogleheads.org/wiki/Outline_of_Non-US_domiciles
Re: Dividend Stocks without Estate Tax
As far as I know "the" SWR wasn't established at 4% for:
1. a very high equity allocation (you don't specifiy);
2. a high-dividend-yield focused equity portion;
3. a global equity portion.
So I wouldn't have much confidence in that strategy.
Re: Dividend Stocks without Estate Tax
My main point with the 4% comment is that if you receive a 4% yield, your portfolio will probably still grow. If you reach for too much yield you might be having a shrinking portfolio value, either in nominal or real terms.
About my withdrawal strategy, just to be clear, I never mentioned I don't hold bonds. I still hold (and would recommend if asked) bonds to handle the downturns of the portfolio and/or the dividends.
My withdrawal strategy is not the same as the standard 4% rule. I'll let the dividends decide my spending (my spending is flexible) and I hold bonds in case they get cut too much.
I don't think its dangerous; dividends have been relatively stable: https://www.simplysafedividends.com/int ... ar-markets and according to firecalc and portfolio charts value stocks support an even higher SWR than the total market.
About my withdrawal strategy, just to be clear, I never mentioned I don't hold bonds. I still hold (and would recommend if asked) bonds to handle the downturns of the portfolio and/or the dividends.
My withdrawal strategy is not the same as the standard 4% rule. I'll let the dividends decide my spending (my spending is flexible) and I hold bonds in case they get cut too much.
I don't think its dangerous; dividends have been relatively stable: https://www.simplysafedividends.com/int ... ar-markets and according to firecalc and portfolio charts value stocks support an even higher SWR than the total market.
Do you have any evidence?
Re: Dividend Stocks without Estate Tax
Total return numbers as published by Vanguard.
of the neutral fund: FTSE All-World UCITS ETF (USD) Distributing (VWRL) https://www.vanguard.nl/portal/instl/nl ... erformance
and of the High Dividend Yield subset: FTSE All-World High Dividend Yield UCITS ETF (USD) Distributing (VHYL) https://www.vanguard.nl/portal/instl/nl ... erformance
Code: Select all
Fund 1 Year 3 Years 5 Years
VWRL 41.79% 13.76% 14.11%
VHYL 40.90% 8.44% 9.36%
BeBH65. (only an investment enthusiast, not a financial adviser, perform your due diligence). |
Have a look at https://www.bogleheads.org/wiki/Outline_of_Non-US_domiciles