# How to calculate how much of dividends will be earned for an ETF?

Let's say that I have 100 shares of the SPYD ETF. The current Annual Dividend/Yield is \$2.27/5.47%.

Is that the case that after a year I'm going to get paid 100 * 2.27 = \$227.00?

• Note that the dividend is not "income" to you - it's a "distribution" of ~2.27% of your investment - the value of the ETF will go down by the same amount. – D Stanley May 7 at 19:42
• Is it not the other way round? You are paid Dollars and calculate the percents retrospectively from the sum of Dollars and the current price per share. – Bernhard Döbler May 8 at 22:53

Published dividend yield is calculated based on the current unit/share price and most recent annualized distribution. Your yield will change over time as you receive dividends.

Assuming you paid the current price of \$41.68 per unit for your 100 units of SPYD, your cost basis is \$4,168. If the distribution holds to the most recent paid of \$0.6362/unit your annual distribution will be \$2.5448/share or \$254.48 for a yield of 6.1%.

If, next year the unit price is \$61, and the quarterly dividend is up to \$0.85/unit, the published yield will be something like 5.6% (\$0.85 * 4 / \$61); but your yield will be based on your purchase price of \$41.68, so \$0.85/unit would be 8.2%.

Distributions tend to fluctuate over time. The actual most recent annual distributions sum to \$1.9026

``````03/24/2021     \$0.6362
12/23/3030     \$0.6066
09/23/2020     \$0.2636
06/24/2020     \$0.3962
``````

If you had bought in June 2020, the unit price was around \$28.50; the published yield at the time would have been something like 5.6% (\$0.3962 * 4 / \$28.50). In the last year you would have actually received \$190.26 for your 100 units which cost you \$2,850 for an actual annual yield of 6.6%

• Also your calculation of "your yield" may be a bit confusing. I've never considered "yield" to be based on the purchase price, but rather the current value of the investment. Say I bought an ETF 50 years ago for \$1, and it's now \$100 and pays a \$1 dividend. Is my "yield" 100%? I'd argue that it's still 1% since I could sell the etf for \$100 so my choice to stay in the ETF has a "cost" of \$100. – D Stanley May 7 at 19:16
• A lot of people harp on your first point about 'what is the value of a dividend' if it comes out of the investment; and that's fine for someone else to write; I think it wildly over complicates a relatively simple concept. Buffet also refers to distributions this way in the Berkshire Annual Reports. My investment has a current value, sure, but I didn't buy it at the current value I bought it where ever I bought it; and part of the value of very long term holding can be very high dividend yields relative to your initial investment. I don't disagree with you but I'm happy with what I wrote. – quid May 7 at 19:39
• fair enough - I've moved it to a comment on the question rather then getting construed as a critique of your good answer. – D Stanley May 7 at 19:43