Investing July 18, 2026 0 Comments

This One Concept Is Killing Your Growth—Here’s Why Nobody’s Cracking It (Yet)

Ever sat there scratching your head, wondering why dividend investors—or heck, most investors—just can’t seem to grasp that managing your own portfolio or putting your money into a fund with units isn’t worlds apart? It’s like we’re all chasing the same dream, playing the same game, but somehow missing the scoreboard. I was deep in a Dividend Investment Telegram convo recently and noticed the lightbulb wasn’t quite switching on for some folks. Maybe it’s time we break down the whole thing with a simple picture or two. Imagine you’ve got 30 dividend-paying stocks lined up, cash tucked in, and a perfectly curated portfolio. Now flip the script — what if that $70 million prize were parked inside a fund, managed exactly how you would do it? No tricks, just straight-up, same-old strategy wrapped in a different wrapper. Would it really feel all that different? Heck, when markets nosedive and your portfolio takes a hit, does the pain change just because it’s in a fund? Let’s dive in and unpack why the structure might not actually shake your investing world as much as you think. LEARN MORE

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Sometimes I have no idea why dividend investors, or generally most investors cannot see that if you have an investment strategy that you personally manage, versus in a fund that you get units from, there is not much difference.

The hopes and dreams are the same, if you assume that the thinking, implementation and execution is the same.

I was having a discussion in the Dividend Investment Telegram chat and felt folks just don’t quite get the framing.

Perhaps some pictorial would be much simpler.

Say this is how you currently manage your portfolio

You own 30 dividend stocks and generally you should have your cash holdings. There is a reason why you prefer to invest this way. You have your own way to curate your stocks. You are probably afraid of some market volatilities especially if your aggregated portfolio value drops 20-30% and you felt that you don’t want to sell your stocks and only spend dividends.

Well what happens if this portfolio is $70 million and you can actually put it in a fund structure like a single or umbrella Variable Capital Company (VCC). You engage in a person who totally gets what you are doing and operate in the SAME manner.

If you want to buy and hold these 30 stocks, never sell, the same manager will do that. If you only want to spend income only from pure dividend payouts from the 30 companies, the portfolio manager will also do that.

You can move this $70 million into it, which will have the same value as today. And we will issue units that is worth $10 today. You would have 7 million units.

Let’s say this is an accumulation class of funds that does not have any distribution. In order to gain cash flow from your fund, you would have to sell units.

Your hopes and dreams are not too different. They live by the 30 stocks picked just whether its in a fund, and the philosophy of investment and management that is in the fund.

And if that is not too different from how you would do it today, what will be different?

You can say perhaps the manager would cost more, and thus I use $70 million so that the cost would be more optimized. You can say the portfolio manager would deviate from what you do or that this can never be correct in reality. That is true but I think the exercise focus less on the manager but outside and within a structure.

How different is the hopes and dreams if the $70 mil drops 30% and becomes $49 million?

Whether it is personally manage or in the fund is the same.

If you are worried about the drop in securities, you see it more front and center managing yourself but in a fund you would not see it.

What’s hard for investor in a fund structure to deal with is:

Am I selling too much such that I will kill my portfolio?
If I sell too little, then I cannot maintain my quality of life.

But whether the investment thrives or faces challenges has less got to do with whether inside or outside a fund.

Yes you can say if I decide to take out $10 mil worth of income, would it potentially impair the fund, but you would also need to extract $10 mil worth of income from your portfolio if you personally manage it.

This is the part that I don’t know why some investors cannot visualize it.

The problems you faced in income is simpler in some ways than you imagine but in other areas it is more complex than you think.

Sometimes, we learn fragilities of our current strategy over time. It is whether we lie to ourselves or have enough humility to prevent our bias from improving our strategies.

Structures don’t affect the investment strategy if you don’t wish to change the investment strategy.

Income investors can always invest in a fund that is in accumulation class that doesn’t distribute. It will be the same stocks that you have affinity towards.

If you manage your dividend stocks yourself, you own a different set of stocks. There are benefits but its whether you are also able to see the fragilities of being your own portfolio manager.

Kyith is the Owner and Sole Writer behind Investment Moats. Readers tune in to Investment Moats to learn and build stronger, firmer wealth foundations, how to have a Passive investment strategy, know more about investing in REITs and the nuts and bolts of Active Investing.

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Kyith worked as an IT operations engineer from 2004 to 2019. Currently, he works as a Senior Solutions Specialist in Fee-only Wealth Advisory Firm Providend. All opinions on Investment Moats are his own and does not represent the views of Providend.

You can view Kyith’s current portfolio here, which uses his Free Google Stock Portfolio Tracker.

His investment broker of choice is Interactive Brokers, which allows him to invest in securities from different exchanges all over the world, at very low commission rates, without custodian fees, near spot currency rates.

You can read more about Kyith here.