The Lemon Fool

As someone who is seeking to invest primarily for income and who has previously focused my attentions on ITs, I am considering using the ISA allowance this year to buy income focused ETFs. This would be for low cost LTBH income purposes. I've been looking at the Global and UK Dividend Aristocrats and have a few questions that you more knowledgeable ETF folk will be able to answer.

Taking GBDV and UKDV from SSGA, HL (which I only use for info, not as a platform) shows the respective yields as 4.56% and 4.09%. However, SSGA's own website, and others such as ii show them as 3.4% and 4.64%. I would normally ignore HL, but SSGA's figure of 3.4% for its Global Div Aristocrat seems low. Anyone know why the discrepancy?

Also, I'm struggling to find historical data on the dividends paid in previous quarters and years. Anyone know where I can find this?

BrummieDave wrote:
Also, I'm struggling to find historical data on the dividends paid in previous quarters and years. Anyone know where I can find this?

I've looked at this recently and can only find one source of dividend history for ETFs (other than the ETF providers themselves):
https://www.justetf.com/uk/etf-profile. ... =dividends

--kiloran

kiloran wrote:(other than the ETF providers themselves)

Thanks for the link - I couldn't find the divi history on the provider's website actually, they just seem to report TR

Look at OEICs as well

The SPDR web site does seem to be very lacking on this sort of thing compared with Vanguard and iShares, who provide all historical dividends and daily prices since inception.

p.s. I have said before that these dividend aristocrat style ETFs look expensive in terms of p/b and p/e, which is one of the reasons I have always been against them. However, this no longer looks to be the case. The p/b and p/e of GBDV are now lower than those of the equivalent SPDR world tracker, so GBDV is closer to being a value fund. OTOH, UKDV still looks more expensive than the UK market when it comes to p/b, but not p/e.

The other reason I don't care for these ETFs is that the strategy involves buying shares that have a long term record of rising dividends, then selling when they cut dividends. Any company with a long term record of rising dividends is likely to be priced at a premium. That premium will be lost when they cut dividends, so this seems to be a buy high, sell low strategy. Normal value funds, which should (on average) pay above market dividends, will do the opposite by buying shares when they are on low valuations and selling when valuations are high. In other words I think the price paid for the promise of a less volatile and rising dividend stream may well be worse long term performance. That may of course not matter to someone who is looking for a lower risk investment than the market.

With regard to GBDV, would the dividend returns be classed as " foreign income" when it comes to an annual tax return?

If held in an ISA, would it need to be declared as income (assuming it is classed as foreign income) even if held in an ISA?

monabri wrote:If held in an ISA, would it need to be declared as income (assuming it is classed as foreign income) even if held in an ISA?

Nothing in an ISA goes into a Tax Return. That's the point really. As a rule of thumb, if you need to make a choice, it's the holding with the more complex tax that goes into the ISA.