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Debt recycling to invest in ETFs

Investing Strategy

Hi everyone, I’m in my late 40's and looking into debt recycling to invest in a diversified high growth ETF. Just wondering if it makes more sense to go with DHHF (lower yield) or VDHG (higher yield)? And would this need to change as I get closer to retirement? Keen to hear your thoughts and experiences.

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Saravanan null

Asked on 4 September 2025

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Dave Gow - Strong Money Australia

Investor

Tue, 16th September 2025

Hi Saro,

We covered this in one of our Aussie FIRE Podcasts on debt recycling and using debt to invest – I believe it was either episode 36 or our 2-part episodes on debt recycling ep 19 + 20.

Given the funds are pretty similar and debt recycling is about tax benefits, there is a greater tax benefit with the lower yield one. When it comes to retirement, you probably want to get rid of the debt by then and live off the investments. For that, a higher yield option will be simpler, but it can also be done with a lower yield option by harvesting some of the growth by selling a few shares.

Probably best not to switch later due to capital gains tax.

Hope that helps

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