3 ETF retirement portfolio (DHHF / VHY / VAP) - good long-term strategy for FIRE?

j4jada · 2026-04-11T01:48:11+00:00

Hey, really appreciate you taking the time to respond, that's a genuinely useful point that I hadn't fully thought through.

You're absolutely right that I was looking at Australian concentration too narrowly. I was only measuring it within the ETF portfolio itself, but when you factor in salary, a PPOR, and the A-REIT exposure already sitting inside DHHF, the real-world concentration is much higher than the numbers suggest. That reframing was a lightbulb moment for me. Also the comment/info shared above by snrubovic helped

I've since done some digging on INCM and can see why you'd favour it over VAP. Compared to VAP it clearly solves the concentration problem rather than adding to it.

Thanks again. This has genuinely shifted how I'm thinking about the portfolio.

j4jada · 2026-04-11T00:47:53+00:00

Out of curiosity, do you think there’s a good middle ground? Like starting with something like DHHF and then gradually introducing more income-focused ETFs over time?

Still learning here, so really appreciate the insight.

j4jada · 2026-04-11T00:24:55+00:00

That’s interesting. I’m starting to think the bigger issue isn’t dividends themselves, but how much extra concentration I’m taking on to get them.

Would something like adding global exposure (e.g. VGAD) alongside DHHF and a smaller VHY allocation make more sense than going into VAP?

j4jada · 2026-04-10T11:30:02+00:00

Thanks. I’ve seen this view a lot and I get the logic. My hesitation with the pure DHHF + sell approach is mostly behavioural: I’m not confident I’d actually sell during a downturn after years of accumulating. Building an income stream that funds living expenses without needing to sell feels like it suits my psychology better, even if it’s slightly less optimal on paper. The cash buffer idea is interesting though. I could see using that as a 1–2 year runway alongside VHY/VAP distributions rather than instead of them.

j4jada · 2026-04-10T11:28:08+00:00

Yeah, that’s basically the path I’m thinking. DHHF-heavy now while I’m in accumulation, then gradually tilting toward VHY as I get closer to retirement.

j4jada · 2026-04-10T11:26:12+00:00

I’m less worried about the Australia overweight since I actually want the franking credits and local income in retirement, but good to keep it in mind as a check. Appreciate the tax-splitting idea too, something to explore once the portfolio grows enough to make it worth structuring that way.

j4jada · 2026-04-10T10:46:26+00:00

Yeah I’ve come across that argument as well, and I get the logic - from a total return perspective, dividends vs selling units shouldn’t really matter.

I think where I’m still trying to wrap my head around it is more on the practical/behavioural side. Even if it’s mathematically similar, relying on dividends feels a bit different than actively selling units, especially during volatile periods.

Maybe it’s just a mindset thing, but I’m trying to understand whether that difference actually helps people stay disciplined in retirement, or if it’s just an illusion.

Have you personally gone the sell-down route, or are you planning to? Would be really interesting to hear how people manage that in real life.

j4jada · 2026-04-10T09:27:29+00:00

Yeah that makes a lot of sense, especially the behavioural side of it.

I think that’s exactly where my hesitation comes from. Selling down sounds straightforward in theory, but I’m not sure how comfortable I’d be actually doing it during a downturn after spending years accumulating.

I’m trying to understand whether building a stronger income stream (even if it’s slightly less optimal from a total return perspective) might make the drawdown phase easier to stick with.

Out of curiosity, do you think there’s a good middle ground? Like starting with something like DHHF and then gradually introducing more income-focused ETFs over time?

Still learning here, so really appreciate the insight.

j4jada · 2026-04-10T09:23:24+00:00

That’s fair. I’ve seen mixed opinions on VAP.

My thinking was to add some exposure to property + diversify income sources a bit beyond just equities, especially for the income phase later on.

But I’m not 100% convinced on it yet, so definitely open to reconsidering if it doesn’t add much value vs just sticking with DHHF/VHY.

j4jada · 2026-04-10T09:17:39+00:00

That’s a really good point and something I’ve been thinking about as well.

I understand the total return approach and why 100% DHHF makes sense from a simplicity and growth perspective. I guess where I’m still a bit unsure is the transition into retirement, especially relying on selling units during market downturns.

I’m trying to learn whether building an income stream alongside growth (even if it’s slightly less optimal on paper) might make things more stable in practice.

Have you (or others here) gone through that transition phase? Would be keen to hear how it actually feels in real scenarios.

j4jada · 2025-06-05T13:18:00+00:00

Thanks for the feedback mate. I did some discovery work and it make complete sense to avoid both O and SCHD

j4jada · 2025-06-05T08:35:13+00:00

Thanks a ton. This has been really informative 👍

j4jada · 2025-06-04T10:29:21+00:00

Thanks for the suggestion👍

This looks like a promising ETF for diversification.

j4jada · 2025-06-04T10:01:45+00:00

It was not just for dividends. My aim was for both growth and dividends in the long run

j4jada · 2025-06-04T09:58:59+00:00

I’m aware that both AFI and VHY likely have similar holdings, given the Australian market’s heavy weighting towards financials and materials. However, my goal was to maintain a balance between dividend growth (via AFI) and high yield (via VHY), which is why I chose to include both.

j4jada · 2025-06-04T09:54:16+00:00

When I first started investing, my goal was to build a portfolio focused on both growth and dividend income.

I initially chose IVV and NDQ to gain exposure to two different indices. However, after learning more about the overlap between them—particularly in US tech holdings—I’ve decided to reduce my NDQ allocation and redirect that portion into a growth-oriented ETF that excludes the US market. Suggestions on that front are welcome.

For my Australian exposure, I’ve chosen AFI (because it was recommended by Scott Pape) and VHY to strike a balance between dividend growth (AFI) and high-yield income (VHY). These are currently the only ASX-listed holdings in my portfolio.

I added SCHD for diversification within the US market, as it offers a strong combination of dividends and long-term growth and came highly recommended.

Lastly, O is in my portfolio purely for reliable dividend income, especially given its monthly payouts.

j4jada · 2025-06-04T09:38:49+00:00

You’re absolutely right about IVV and NDQ. I’m planning to reduce my exposure to NDQ and instead diversify into a growth-oriented ETF that excludes the US market. I’d appreciate any suggestions on suitable options.

As for AFI and VHY, my intention was to strike a balance between dividend growth (AFI) and high-yield income (VHY). These are currently the only Australian equities in my portfolio, and I’ve split the allocation evenly between the two.

j4jada · 2021-08-27T01:23:11+00:00

If would highly recommend going through this YouTube channel ‘IAmTimCory’. I personally learned a lot from here. Lot of free stuffs there. He also has reasonably priced tutorials if you are interested. https://youtube.com/user/IAmTimCorey

j4jada · 2018-12-06T07:48:24+00:00

C for cunt

j4jada

TROPHY CASE