VDHG vs VHY for a +30y plan with $40k investment

ratoloko on 11/07/2025 - 19:56

Me:

  • Middle 30s
  • $40k (ING Maximizer Saving)
  • +30y long term plan

I have been saving some money with ING Maximizer ( it has decreased to 5.00% p.a and only up to $100k before decreasing to breadcrumbs interest )
I believe I could make better use of that money, I am not getting into a 30 years home loan and even if I was, it is far from 20% of the cheapest house.

  • VHY: Australia market with high yield. The next distribution is $2 per unit
  • VDHG: Australia and international market with a humble yield. The next distribution is $1.12 per unit.

I have a bit of both already and set to Dividend Reinvestment Plan (DRIP) with Computershare., so I am not touching their returns and neither dealing with tax dramas during the tax return. Buy ETFs monthly and forget attitude.

No panic-selling either, monthly buying disregarding the market since I am aiming 30-40 years.
I do have an emergency savings that will keep me going for a few months if life goes sideways.

Also, you shouldn't leave all eggs in one basket so after some readings, it is recommended to invest into bonds too.
VAF (Vanguard Australian Fixed Interest) seems to be a bonds option, so invest into VHY and VAF???? VDHG and VAF???

50-50%???
80-20%???

It feels too perfect of a plan meaning I am missing something important.
I appreciate the opinion from those who have been doing this for a long time.

Thank you very much.

Financial

Comments

    • ratoloko on 12/07/2025 - 10:02
      +12

      Both are bubble, both have been up and down.
      A single Elon tweet wipes out millions from Tesla value.

      Crypto is an even bigger bubble, if you didn't start a decade ago, it is too late now.
      It is too expensive, unstable with no regulations.
      People have lost their entire life savings for being a) too dumb and b) not knowing what investing into crypto means.

      Both investments is a money you are willing to lose either partial or full, full stop.

      • V2L on 12/07/2025 - 14:14
        -3

        all investments are risky, some more than others, you just to diversify your portfolio and risk manage appropriately. btc has enormous institutional inflow now, it's not going crash and burn in cycles like it did before.
        it's not too late. you could have loaded up at 80k 3 months ago and be up 50%

        • IcySpicyStew on 12/07/2025 - 20:20
          +10

          OP has very little experience with investment but talks about bubbles like he knows what's happening

      • IcySpicyStew on 12/07/2025 - 20:19
        +2

        Both are bubble, both have been up and down.

        Why are you looking at short timeframe?
        If you are claiming to not be a panic seller, try zooming out

      • RocketSwitch on 12/07/2025 - 21:40
        -1

        What are you talking about? NVIDIA has more market cap than the entire crypto market. Too late? Understand cycles.

    • Tiredman on 13/07/2025 - 09:25

      Sounds good.

    • DingoBilly on 14/07/2025 - 03:41
      +1

      Save yourself the trouble and put all your money on black at a roulette table.

      Same investment strategy, but at least you find out now whether you've doubled your money or pissed it all away.

  • mskeggs on 11/07/2025 - 20:24
    +2

    what does the bit about tax returns mean?

    and set to Dividend Reinvestment Plan (DRIP) with Computershare., so I am not touching their returns and neither dealing with tax dramas during the tax return.

    • elgrande on 11/07/2025 - 23:15
      +1

      No dramas with the tax stuff ..

      • kraigg on 12/07/2025 - 08:05
        +19

        Whether you reinvest the dividends via DRP or receive the dividends as cash, you still have to deal with the same tax stuff every financial year, as the ATO treats both forms of dividend the same way, right?

        • mskeggs on 12/07/2025 - 09:15
          +2

          Correct, the DRP doesn’t change your tax position/obligations, just the company gives you a small discount to buy more as a sort of ‘loyalty’ bonus.

        • vorsprung on 12/07/2025 - 09:56
          +2

          Correct. Dividend Substitution Share Plans (DSSP) are different, but I think these are uncommon? Seems most offer Dividend Reinvestment Plans (DRP).

      • Dsiee on 13/07/2025 - 13:35
        +2

        DRP makes the tax side a lot more complicated as the ATO doesn't care how you buy (DRP or regular buy orders) so you end up with a transaction every quarter making the cost basis a pain to keep track of. The dividend is still income for the year it is received regardless of DRP status and still nedds to be (or is automatically for many now) reported to the ATO and have tax paid on it.

        • lint on 14/07/2025 - 13:16
          -1

          It's not that complicated as long as you keep track of the DRP purchases each time. Not any different from making regular investments - you'll lose track of them too if you're not recording them. Basically if you're gonna be investing in the share market and ETFs, you've gotta do some sort of due diligence and get your papers in order.

      • bbinc on 12/07/2025 - 10:10
        +24

        Reinvestment is still income that needs to be declared. Sorry …

        • ratoloko on 12/07/2025 - 10:26

          Ohh I see, so forget what I said.

          • Ace26 on 12/07/2025 - 21:49
            +3

            @ratoloko: Choose a fund that doesn’t pay distributions (an accumulation fund) so the unit price grows faster and you defer tax on earnings until you sell, when you’ll pay capital gains tax.

          • huggsymersh on 14/07/2025 - 12:03
            +1

            @ratoloko: That's why a high yielding ETF, or a fund that aims to achieve a regular yield, like VHY, is not necessarily ideal for long term holders who want to maximise growth. You would prefer small distributions over larger, as it effectively defers your tax until you sell (if you ever do).

            But even the balanced diversified funds like VDHG, that don't emphasise yield, tend to push out big distributions fairly frequently.

            Worth doing more research on this to come to the balance that feels right for you. It's good to look for a fund that has the right mix that appeals to your risk profile. You probably can't avoid distributions/tax entirely, but it's just important to know what your getting into.

      • pandawelch on 13/07/2025 - 15:20
        +3

        Without DRP:
        1. You recieve dividend income and put it in your bank account.
        2. You pay tax.

        With DRP:
        1a. You recieve dividend income.
        1b. You buy a small amount of shares immediately.
        2. You pay tax.

      • Merish4U on 14/07/2025 - 17:02

        Not to pile on you OP - BUT if you're messing thing basic detail up…..perhaps…..the rest of your grand plan also needs double checking before you enact it?

        There's no better way to fudge your investment returns up than committing to a certain path of action - then several months in realising you cocked it up and then have to redo it all over.

        Plus I get the sense you'll perhaps tinker with things - hence as I said I would lump sum (yes it's mathematically a better result than DCA) into DHHF and be done with it. Keep it simple and that is an investment thats very hard to beat.

  • JIMB0 on 11/07/2025 - 20:46
    +1

    VHY is going to pay out a lot of the return in the form of dividends. This will be taxable and if you don't need the income will hurt your returns.

    VDHG doesn't seem to live upto it's name with broad based index funds easily outperforming it.

    Bonds don't seem to pay anymore then you'll get from a high interest account, although with interest rates falling you might see a capital gain but remember this goes the other way when they rise.

    • pencilman on 11/07/2025 - 20:54
      +1

      I agree. I've been disappointed with VDHG compared to holding VAS or VGS separately.

      Maybe someone smart can explain exactly why. But that's my experience.

      • skid on 12/07/2025 - 08:02
        +2

        VDHG is safer, that's why.

        • Bidet Mate on 13/07/2025 - 07:50

          Usually "High Growth" makes you think of less safe.
          Other than the weird bond allocation I thought the idea was for it to be more aggressive than VAS etc.
          I've been pretty disappointed that all of my Vanguards have only very marginally beat my HISA's in the last 5 years.

          • dtc on 13/07/2025 - 11:14
            +4

            @Bidet Mate: VDHG is literally invested in VAS (33%). It’s not more aggressive than VAS, it’s just designed as a single holding that covers multiple different Vanguard funds. All of which are index funds so do exactly as well as the index. If you want more aggressive then try GHHF.

            Given that VDHG returned 15% last year and just under 10% since 2017, I would love to get into your HISA accounts if they are almost as good

            You aren’t mixing up yield with total return are you?

          • Munners1989 on 13/07/2025 - 11:46
            +3

            @Bidet Mate: You definitely shouldn't be disappointed. That is investing - you can't use a 5 year period as the means of determining whether something is a good investment or not. If your investment goal is 5 years, Vanguards probably aren't the best 5 year investment. Also, interest rates being >5.5% has meant that Vanguards etc haven't had as higher of a return compared to a HISA than one would normally have. Investing in ETFs certainly isn't a guarantee to earn <8% per year - like everything there are risks and market fluctuations. Be patient and stay in there for the long haul if you can.

      • ratoloko on 12/07/2025 - 10:32
        -1

        VHY is going to pay out a lot of the return in the form of dividends. This will be taxable and if you don't need the income will hurt your returns.

        Hurt the returns?? How come??
        Knowing that it does have reinvestment plan, the returns will buy more units, repeat.
        The goal is to reach $100k asap so with a high dividend and reinvestment plan, that is the "perfect" approach.

        VDHG doesn't seem to live upto it's name with broad based index funds easily outperforming it.

        VDHG is a monthly buy and forget attitude with reinvestment plan.
        The goal is to reach $100k ASAP from which point the money it returns does everything for you without the mandatory monthly buy.
        It is I think the most popular and the safest ETFs to invest into.

        • JIMB0 on 12/07/2025 - 11:00
          +4

          Hurt the returns?? How come??

          The dividends are considered income which you need to pay tax on even if you reinvest it. You'd be better off with a company that retains profits and reinvests them within the business or does share buy backs. This will increase the share price and you won't pay tax until you sell, at which point you'll get the 50% capital gains tax discount if you've held them for more than 12 months.

          • ratoloko on 12/07/2025 - 11:12
            +1

            @JIMB0: Ah I see, well, in that case ASX:CSL.

            They are a global biotechnology company engaged in research, development, manufacture, marketing and distribution of bio-pharmaceutical products and vaccines.

            VAS for instance holds 4.57% from CSL as of now.
            They are pretty good, I used to have some. Often when everything was going down, they were stay still.
            And like you mentioned, they do not pay out but reinvest into the company.
            So holding everything for up to 1y at least, I am aware of the 50% tax discount.

            hmmm I might need to look into this differently.

            A) Invest into CSL which has no reinvestment plan so you must buy it every monthly, and no tax to pay during the tax return and once you sell it you get 50% tax discount
            B) VHY with high dividend plus reinvestment plan, once it reaches $100k the money "generates money on its own", but you have to pay tax regardless and you also get 50% tax discount.

            Well crappy

            • JIMB0 on 12/07/2025 - 11:23
              +3

              @ratoloko: I wouldn't put too much into one company, it's too risky. Most of my money is invested into an MSCI world index which is mostly large US companies. It pays a small dividend but has had good growth. I just put money in regularly and don't even look at it.

              • ratoloko on 12/07/2025 - 11:42
                -1

                @JIMB0:

                US companies

                With Trump insanity towards tariff, US companies one after another are moving out of the US chasing cheaper labour.
                That includes things like:

                1) A single Elon tweet wipes out millions from Tesla
                2) SpaceX, one of the most important companies period, now is threatened to have its federal contracts revoked by Trump
                3) Apple for a long time, made most of its money from the Apple Store 30% cut and no longer from hardware that is just more of the same. Since that, they can no longer do that so company after company updated their apps to support third party payments breaking Apple largest income source.

                Those are one of the largest US companies, now add the tariffs dramas and mass exodus from the US by US companies, I wouldn't trust into MSCI that much.

                Things might change on the long run indeed, but it just feels too troublesome.
                I am not even getting into dedollarization, China selling US bonds it held so did Japan, countries using their own currency for international trade and BRICS added to the mess.

                That cannot be good for the US market but hey, I am not any specialist or I wouldn't be here talking about this, but the above looks red flag to me.

                • Antikythera on 12/07/2025 - 19:33
                  +1

                  @ratoloko: spaceX is not publicly listed and so is irrelevant to investment discussion. if it were an option i'd get some. it will make some people trillionaires.

                  Personally I like AMD.

                  I also like not having all my investments in the ASX. My income is dependant on the Australian economy. I prefer to not have my investments also local.

                  My super i have 50% international securities, 25% Australian, and 25% international but hedged to AUD. I have my emergency fund in Australian savings but all my investments in international equities. Obviously once I get property it will need to be local.

        • onetwothreefour on 12/07/2025 - 11:14
          +12

          The goal is to reach $100k ASAP from which point the money it returns does everything for you

          You've been watching too many YouTube videos with titles like "why your investments explode when you reach $100k".

          At an average of 10% return on $100k that's only $10k per year. It's still going to take many, many years to hit $1m. The best bet is to keep buying if you can afford to.

          • ratoloko on 12/07/2025 - 11:16

            @onetwothreefour:

            You've been watching too many YouTube videos with titles like "why your investments explode when you reach $100k".

            You aren't wrong there but that is weird, I have watched videos from sources considered trustworthy and they all said the same.

            The best bet is to keep buying if you can afford to.

            Valid, I can do that.

            • onetwothreefour on 12/07/2025 - 11:19
              +3

              @ratoloko: It's simple maths, just plug the numbers into a compound interest calculator online and check for yourself.

              Whilst $10k a year is still good, it will take a long time to become rich. But if you are investing for 30 years like you say then you will be fine.

              • ratoloko on 12/07/2025 - 11:28
                +1

                @onetwothreefour: Understood and thank you for the heads up.

                • pork on 21/07/2025 - 18:01
                  +1

                  @ratoloko: I respect that you started this thread to test your ideas and potentially learn, and plenty of the replies you received contained useful information with a friendly tone. Good on you for taking it on board and hopefully using it to craft yourself a good plan. OzB at its best is a great place.

                  I opened this thread because I also have some VDHD and am starting to think about long-term tax effectiveness. It's given me a bit to think about, too.

          • Munners1989 on 13/07/2025 - 11:49
            +1

            @onetwothreefour: And 10% returns is a lot harder than people make it out to be. People think that if you just buy ETFs, you are guaranteed 10% returns.

    • starspawn on 12/07/2025 - 00:17
      +1

      Reinvest the dividends…

      • brad1-8tsi on 12/07/2025 - 13:14
        +3

        No. Too much admin going forward for very small parcels of shares.

  • Gojkins on 11/07/2025 - 20:50
    +2

    VDAL

    • ratoloko on 12/07/2025 - 10:11
      -3

      This is the first time I heard about such ASX and from what I checked, it is fairly new, March 2025 and no reinvestment plan as of now.
      I am not investing into something we don't even know how it will perform a year from now.

      • Tleyx on 12/07/2025 - 17:40
        +2

        Which ETFs do you know how they will perform in a year and can you tell me

        • ratoloko on 12/07/2025 - 17:58
          -7

          You missed the point by a kilometer buddy.
          VDAL is 4 months old, if you have courage enough to invest that much into an ETF this new, good for you.

          • SBOB on 12/07/2025 - 18:26
            +7

            @ratoloko:

            VDAL is 4 months old,

            VDAL is a fund holding a diverse allocation if existing underlying vanguard funds
            https://www.vanguard.com.au/personal/invest-with-us/etf?port…

            you think its "4 months old" and that provides any indication into its validity or 'safe' investment status means you clearly dont understand how these kind of ETFs even work

            • V2L on 12/07/2025 - 18:35
              +5

              @SBOB: the way to operate nowadays seems to be "be wrong with confidence"

              • SBOB on 12/07/2025 - 18:50

                @V2L: yep, and below they claim $24k super contributions, which assuming its a normal PAYG super rate, puts them on ~$200k/yr.
                They should drop a few bucks on some financial education as they could be easily wasting sizeable $ amounts making poor decisions like thinking buying a single asset like CSL is 'safer' than a '4 month old' diversified broad market ETF (and leaving their super in 'balanced' for 30+yrs)

          • Antikythera on 12/07/2025 - 19:38

            @ratoloko: past performance is no indicator of future growth.

            look for broad funds with low fees. index funds usually tick that box.

    • trashcan on 12/07/2025 - 19:08
      -2

      The underlying assets of VDAL are other Vanguard ETFS. One ends up paying the management fees twice.

      • dtc on 13/07/2025 - 11:23
        +3

        No you don’t, the fee from the underlying ETF is fully rebated. It’s right there in the PDS.

  • lakes_8 on 11/07/2025 - 21:22
    +11

    With that time frame wouldn't you just put it in super

    • theHMASfriendship on 11/07/2025 - 22:54
      +7

      jv said Albo will steal it

    • ratoloko on 12/07/2025 - 10:18
      -7

      Others have said the same, they wished they have invested into their super but there are catches.

      From what I gathered, there is a $36k limit or something along those lines so if your super incoming goes beyond that, you get destroyed with tax.
      My super atm received $24k as "contribution" so I don't wanna touch that.

      Also, the current gov with silly laws and all, doesn't make that a trustworthy option.
      I feel like investing yourself, you have the control of things like if laws or market shift drastically, you can follow suit.
      Money sent to super will stay there until you can touch it 30y from now so there is nothing you can do.

      Personally, I don't like this enforced restriction so more and more I gave up the idea of investing into my super.

      • plmko on 12/07/2025 - 11:06
        +7

        I think you have huge misunderstanding of the rules or what is possible for the average person.

        You seem like you have a plan already, but worth reading up again or ask a professional.

        • mskeggs on 12/07/2025 - 14:11
          +3

          Too busy with vibes based investing

      • bbinc on 18/07/2025 - 10:38
        +2

        OP. My thoughts. You are to be applauded for wanting to invest proactively, and you are considering some of the complexities of tax and growth. But only some. There’s fees, tax free environments, diversification, allocations, risk assessments, valuations, and having a fun lifestyle. Super is a fantastic tax haven, over which you can have a lot of control. The investments in super can be directed by you, or you can leave it to the professionals, picking and choosing from the buckets they offer. With your timeframe you’ll never match the tax benefits in super. Once you start taking a pension from super over 60 it’s tax free and the earnings and even the years of capital gains on your CSL shares held in super are tax free (up to $2 million indexed). And if you were to learn enough to manage your own super fund you can reduce your costs dramatically - but don’t even think about that until you can pass a basic financial planning test.
        You could choose to get across the whole financial planning information diaspora, which you can do from books from people like Noel Whittaker and others, or you could take an Adult Education or TAFE course. Drop into a Dymocks store and have a look at the range of books available on personal finance in Australia. Browse the contents and see if there are chapters on things you haven’t even thought about. If you have or expect to have a partner, there can be strategies for minimising your tax also. Most YouTube investment videos miss the overall picture, and especially miss how to tailor your investments to suit your needs.

        Best of luck, make mistakes and learn from them, and most of all have fun.

  • brendanm on 11/07/2025 - 23:05
    +2

    All in on EOS.

    • brendanm on 15/07/2025 - 22:43

      Up about 30% since this post 😂. Should have followed my own advice.

  • AndyC1 on 12/07/2025 - 07:20
    +1

    NFT all the way.

  • skid on 12/07/2025 - 08:11
    +2

    Keep in mind you'll have to pay tax on the ongoing distributions from VHY. You'll have to with VDHG as well, but the VHY distributions will be higher.

    First suggestion is to put the 40k and monthly buys all into VDHG.

    Another plan would be to put the 40k into VHY to give it a boost early on, leave it on DRIP and VDHG for all monthly buys.

    Wouldn't invest in VAF at the stage you're in.

    • ratoloko on 12/07/2025 - 10:24

      Another plan would be to put the 40k into VHY to give it a boost early on, leave it on DRIP and VDHG for all monthly buys.

      That is a good approach and an option that makes sense to me especially regarding giving a big first boost.

      As for the tax from what I think I understand is that by reinvesting it, there is no income so I will only pay the usual tax like holding ETFs for at least a year pays 50% less tax.

      This is the first time I heard about such ASX and from what I checked, it is fairly new, March 2025 and no reinvestment plan as of now.
      I am not investing into something we don't even know how it will perform a year from now.

      • skid on 12/07/2025 - 11:39
        +4

        About the tax, say in 2026-27, you receive $1000 every 3 months distribution from VHY. You have DRIP, so the $4000 gets reinvested into VHY making it $44000. But when you fill in your tax return, the $4000 distribution is considered dividend income. So in 2027, you'll pay tax of that $4000. Let's say at 30% tax rate of the $4000. You'll have to pay +$1200 tax even though you haven't sold any VHY units. In a way, you can think of that as contributing into VHY i.e. you've put in $40000 + 1200 into VHY and it is worth $44000. This is what JIMB0 means by hurting your returns.

        • ratoloko on 12/07/2025 - 11:48

          You'll have to pay +$1200 tax even though you haven't sold any VHY units

          Oh wow, but hold up a sec, I did provide my TFN so don't they take the tax before making the payment so I won't have to pay out of pocket $1200??
          Or are you just highlighting what is happening under the hood??

          Either way, thanks for the explanation, I understand the "hurting your returns" now.

          • skid on 12/07/2025 - 11:53
            +3

            @ratoloko: You'll have to pay $1200 out of pocket to the ATO even though you have provided your TFN. It is not happening under the hood. Think of it like interest in a bank account. In reality, it'll be less than $1200 as VHY will have some portion with the 50% CGT discount and some franking credits, but it is definitely not $0.

            • ratoloko on 12/07/2025 - 11:57
              -6

              @skid: Goddamn, so you will get screwed in one way or another haha

              Unless you invest into something like ASX:CSL which are pretty good (global biotechnology company) with no dividend so nothing to be taxed on, and if you sell something you get 50% tax deduction.

              • brad1-8tsi on 12/07/2025 - 13:19
                +2

                @ratoloko: CSL pay a dividend. Around 1.7%

                Do you bother to research the ASX pages or Vanguard's information sheets?

  • LemonShapedRock on 12/07/2025 - 09:13
    +2

    I'd consider VDAL, it's VDHG but without the 10% bond allocation. It's an all equities portfolio so similar to what you would get from VHY but you'll also get some international exposure which I think would be wise given your long time horizon.

    Reinvest the dividends and go fishing.

    • ratoloko on 12/07/2025 - 10:25
      -4

      This is the first time I heard about such ASX and from what I checked, it is fairly new, March 2025 and no reinvestment plan as of now.
      I am not investing into something we don't even know how it will perform a year from now.

  • mskeggs on 12/07/2025 - 09:20
    +8

    Frankly, if your investment horizon is until you are 60, just put some extra in super and call it a day. The tax advantages on contributions and earnings are very good.
    If you get a balance above $3m in your 60s you can withdraw it tax free to avoid the tax that is causing all the billionaires to wet the bed.

    • bbinc on 12/07/2025 - 10:17
      +3

      OP will still get plenty of options to direct your investment choices. Some funds even allow direct investment choices.
      Look for low total fees - most super funds quote their admin fee, but the investment fees are usually buried in the PDS.
      And the returns will not affect OP’s personal tax.
      The tax benefits are very good.

      • ratoloko on 12/07/2025 - 10:53

        direct your investment choices

        From time to time I get e-mail offering that, direct contributions without the usual fees and all.

    • ratoloko on 12/07/2025 - 10:51

      Others have said the same, they wished they have invested into their super but there are catches.

      From what I gathered, there is a $36k limit or something along those lines so if your super incoming goes beyond that, you get destroyed with tax.
      My super atm received $24k as "contribution" so I don't wanna touch that.

      Also, the current gov with silly laws and all, doesn't make that a trustworthy option.
      I feel like investing yourself, you have the control of things like if laws or market shift drastically, you can follow suit.
      Money sent to super will stay there until you can touch it 30y from now so there is nothing you can do.

      Personally, I don't like this enforced restriction so more and more I gave up the idea of investing into my super.

      • mskeggs on 12/07/2025 - 11:17
        +4

        The current limit on super contributions is $30k.
        If you have $24k of contributions already you are doing well, and I would suggest you will have plenty for retirement.
        The media nonsense about the super tax changes will end up costing millions of ordinary people very dearly as they can’t be bothered to understand super and took the media line that the tax changes were silly instead of irrelevant to them.
        You said you wanted a 30yr investment, but now say, actually you would rather pay substantially more tax to be able to access the money at any time.
        Your post history is full of thought bubbles and inability to think things through beyond step one, so you’re probably right not to put extra in for retirement.
        Good luck with whatever you choose, I hope it works out.

        • ratoloko on 12/07/2025 - 11:27
          -3

          If you have $24k of contributions already you are doing well, and I would suggest you will have plenty for retirement.

          According to Hostplus, the last year generated $24k as "incoming" paid by the company.
          I am only paying for the admin fee, I cancelled Death cover and TPD since I am white collar and single so if shit happens, "whatever".
          No income protection also coz from what I heard is pure bullshit so I have my own emergency saving to replace that.

          You said you wanted a 30yr investment, but now say, actually you would rather pay substantially more tax to be able to access the money at any time.

          My plan is 30-40y, I work since I was 9 years old or so, white collar job atm so unless something surreal happened like 1 billion appeared in bank account and now the money is mine ( like I said, surreal ), I need to keep my brain busy and no, I do not plan in opening a business or even worse, digital influencer haha

          • Antikythera on 12/07/2025 - 19:45

            @ratoloko: i'm also with Hostplus and single. I did similar but kept TPD. if i'm permanently injured the payout will help some of the costs.

            within hostplus there is the option to choose how your balance is invested. a few years ago i found that interesting and it spurred me to also better educate my other investments.

          • bbinc on 18/07/2025 - 10:43

            @ratoloko: OP please read the Hostplus PDS, Investment fees. You are also paying those, and they can be way more than the admin fee. But it is still a better tax environment c/f to direct personal investment.

      • SBOB on 12/07/2025 - 11:43
        +3

        My super atm received $24k as "contribution" so I don't wanna touch that.

        If that's pure payg contributions, your salary is clearly high enough that you probably should get a better understanding of some of the investment options and tax implications than your posts above indicate

        • ratoloko on 12/07/2025 - 11:51

          you probably should get a better understanding of some of the investment options

          It is set to "Balanced", I have not touched it because I don't understand the consequences of it.
          Here lies the fine line where I would seek a professional adviser instead of "let's see what sup".

          • tenpercent on 12/07/2025 - 11:55
            +2

            @ratoloko: You should probably change some or all of it to growth considering your time horizon.
            Obligatory legal disclaimer: 'This is not financial advice'.

            • ratoloko on 12/07/2025 - 11:58

              @tenpercent: Understood and understood. I will book some time with the accounting guy.
              Thanks a lot

              • bbinc on 18/07/2025 - 10:46

                @ratoloko: Look for a free consult with an industry fund adviser first. Ask Hostplus what they’ve got. Make notes. Read more about anything they say that you don’t understand. Listen to what most of the OzB team are telling you about learning.

      • brad1-8tsi on 12/07/2025 - 13:20
        +2

        You need a financial planner. Honestly, your financial knowledge needs some professional assistance

        • knasty on 13/07/2025 - 09:20
          +1

          I was thinking the same thing. To spend so much effort on this relatively small investment whilst leaving such large super balance in the balanced fund option is just a case of looking in the wrong direction. For me, maximising concessional contributions and investing in growth oriented low cost super fund has been the strategy. I've found HostPlus to be a great hybrid, giving access to standard sector choices at very low cost whilst also giving a lot more specific choices inc ETFs through their Choice plus product. As always, do your own research…

          • brad1-8tsi on 14/07/2025 - 20:11
            +1

            @knasty: I'm retired and still have my "super" (account based pension) in growth. My investment horizon is still 20 years (assuming death at 80-85). I'll reduce the risk in a few years… maybe.

            • pork on 21/07/2025 - 20:49

              @brad1-8tsi: I don't know much about how retirement income streams work (still quite a few years away for me, so I'm just focused on increasing the balance for now), but assuming you're able to vary the amount you draw down each year (or when the market drops), I reckon it'd be fine to stay in a growth option as long as you were able to curtail your expenses (and hence the amount you're drawing down on your account) a bit during market troughs so you're not selling off big portions of your balance to get you through that 6 or 12 months. Because yeah, in the longer term you'll have much more money if you stick with a higher risk option.

              • brad1-8tsi on 23/07/2025 - 13:42
                +1

                @pork: You are correct. I can go into the superannuation website and vary payments down/up as I see fit providing that I meet the governments minimum drawdown limits (4% for me).

                I keep a healthy cash balance so that when the market poops the bed (eg: Trump tariffs) I can reduce the drawdown until it recovers. At the moment, because of the strong market recovery (which I think is false exuberance) I'm drawing down more than usual to build up cash reserves.

                Here we are 18 months into retirement and I still haven't touched the capital despite my best efforts.

                • pork on 23/07/2025 - 15:50

                  @brad1-8tsi: Nice, thanks for explaining.

                  From what you've said, if it were me I'd definitely be booking some fancy travel and renovating the kitchen when the market is soaring, and keeping things to the basics during a bear run. With a cash/fixed interest buffer of 3 or 6 months of basic living expenses, I'd be keeping the rest in a growth option just like you. A person wouldn't need nearly as much in their superannuation account on the day of retirement if they were committed to that strategy.

                  • brad1-8tsi on 23/07/2025 - 18:28
                    +1

                    @pork: Did 2 small bathrooms and a kitchen, a nice wedding, a trip to Japan and 2x PW2 batteries last year.

                    Just came back from 5 weeks in Africa and off to the UK later in the year.

                    No point being the richest man in the cemetery.

  • brad1-8tsi on 12/07/2025 - 12:51
    +1

    VHY is a very small pond with artificial capital gain due to the amount of superannuation money pouring into it.

    VDHG will have slower growth due to diversification but it will also be more protected from market dips.

    The distribution $$ amount isn't comparable. You should be looking at the overall return as a percentage of share price (distribution + capital growth).

    As a long term, employed investor paying taxes you should concentrate on growth which is only taxed when you sell units. Distributions will be taxed at your marginal rate and payable for that FY.

    DRP sucks on so many levels. Do yourself a favour, save your distributions and buy meaningful quantities.

    I've had VDHG (my largest holding) for a few years but now I'm retired I've started buying A200 for higher dividend returns (income).

    Both my kids (in their 20s) have share accounts that are 100% invested in VDHG because it's pretty much set & forget

    • watwatwat on 13/07/2025 - 01:12
      +1

      VDHG will have slower growth due to diversification but it will also be more protected from market dips.

      Yeah. OP has such a long time horizon, it's not really the most suited thing to buy.

      • brad1-8tsi on 14/07/2025 - 20:14

        Yeah. OP has such a long time horizon, it's not really the most suited thing to buy.

        The main reason I steered my kids into it is they are both saving to buy a property and I didn't want any huge -ve returns to panic them (or their mother). It was a suitable choice when interest rates were 1%.

  • mrvaluepack on 12/07/2025 - 13:49
    -5

    A lot of people don't know that high dividends are NOT considered a factor in stock returns. If you don't know what stock factors are, google and read wiki pages on them. They are basically forms of quantifiable approaches that studies have shown are related to stock returns.

    Therefore VHY and any other high yielding stock index etf are not really good and I wouldn't really touch them.

    Like others have said put more into super, it really is the best structure for almost everyone in Australia. If you want to invest outside of super, VDHG is similar to a super balanced or growth fund.

    My opinion right now is that bond yields are are currently similar or in some countries higher than pe ratios of stock indexes which makes investing in bonds equally as attractive. Therefore, I would structure my asset allocation as of now to 60/40 or 50/50 stocks/bonds.

  • V2L on 12/07/2025 - 14:16
    +1

    if your horizon is long and you're not looking for income VDHG has two issues
    1. relatively high dividends - this will incur tax
    2. it's more defensive with bond in its portfolio

    I'd go for DHHF or BGBL

    • WhyAmICommenting on 12/07/2025 - 16:15

      DHHF or even GHHF. Or both ;)

      • V2L on 12/07/2025 - 18:37
        +1

        the wonderful world of leverage.. I suppose it spices up the otherwise dull world of ETF a little!

      • RocketSwitch on 12/07/2025 - 21:44
        -3

        Why? Horrible returns for GHHF last 5 years. VGS much better.

        • SBOB on 12/07/2025 - 21:55
          +3

          Horrible returns for GHHF last 5 years

          the ghhf that only started trading in April 2024?

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