Dividend Irrelevance

This new video by James Shack covers some similar points to Ben’s on the same topic but with a slightly less adversarial tone and a more of a UK focus so I thought it might be worth sharing as well.

Also since this thread was created Freetrade have started to add a lot of passive factor index ETFs which make targeting a specific risk factor more simple. For example now that we have a Quality Factor ETF it’s possible to invest based on earnings quality without using dividend yield as a proxy for this.

Apple is the highest weighted company in this index and has a high total yield (recently 6-8%) but it doesn’t show up prominently in dividend indices because it distributes most of its excess cash using buybacks rather than dividends, even though the result is functionality identical.

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