Dividend Yields on Portfolio against SPDR STI ETF

In the previous post, I did not factor in dividends received in the study. Each stock in my portfolio provided dividend and SPDR STI ETF gave dividend as well.

I calculate the dividend yield of my portfolio by dividing actual dividends received in the year by the cost price of all stocks. The average dividend yield for each year is provided in the table.

I calculate the actual dividend yield of SPDR STI ETF using the same approach.

Dividends received on stocks and STI ETF
Year Div Yield on portfolio (%) Div Yield on SPDR STI ETF (%)
2015 3.62 2.72
2014 3.58 2.60
2013 3.11 2.07
2012 3.34 2.59

The portfolio yielded an average dividend yield of 3.40% per year, whereas dividend yield for SPDR STI ETF was 2.50% per year on average.

The portfolio of stocks was better than SPDR STI ETF. That was my experience with dividend yields.

Copyright © 2016, limkimtong for Living Investment

The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.

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2 Responses to Dividend Yields on Portfolio against SPDR STI ETF

  1. Benjamin Chong says:

    Hi Kim Tong, can you share with me how you calculate your returns. I am interested to know how to calculate for my own portfolio also

    • limkimtong says:

      Hi Benjamin,

      First of all, the blog post only covers dividend yield and it excludes unrealised capital gains/loss on the stock.
      The fundamental principle is calculating what you get out of investing $X for one year. Like putting money in one year fixed deposit and you get interest for that one year. Calculate the return by taking interest divided by sum invested (in %).

      The tricky part of calculating actual dividend yield is when one buys and sells (say STI ETF) throughout the year. The amount invested varied throughout the year. If you keep the investment stable in the years, then there is no issue. But this is not possible in reality. The closest figure I can get with regard to dividend yield is to calculate yield based on average balance of sum invested in the year. I know this is not precise, but close enough to get a feel of the yield without too much work invested in tracking the investment.

      How to get average balance invested in the year? Take the opening balance at start of year and add ending balance at end of year and divide the sum by 2.

      One can apply the same approach to a portfolio of stocks. The result is less misleading if one can have a stable investment and yield is what one hopes for in investing.

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