Questions tagged [dividend-reinvestment]

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How do ETFs process dividends?

Presumably at least some of the stock shares held by an Exchange Traded mutual Fund produce dividends. Do those dividends just get pocketed by (and taxed upon) the fund managers, as their income to ...
keshlam's user avatar
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Does eToro's Dividend Growth smart portfolio really pay dividends?

Four months ago I started an investment in Dividend Growth on eToro. I once read that dividends are not automatically reinvested but actually go straight into one's balance. However, I haven't seen ...
Richard's user avatar
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Dividend for "accumulating" ETFs?

I'm looking at BlackRock ETFs and for those that "Use of income" is set to "distributing" I can look into the Factsheet and find the dividend. For example: https://www.blackrock....
Danijel's user avatar
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How to effectively reinvest dividend with IBKR

I’m currently investing in numerous index ETFs such as QQQ, VOO, DÍA etc. using IBKR. I have chosen automatic dividend reinvestment in IBKR settings for all my ETFs However non of the dividends were ...
Royyyyy1's user avatar
2 votes
1 answer
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Are there any accumulative ETFs domiciled in the US? If none or few, why? [duplicate]

US domiciled ETFs always distribute dividends and make you pay 30% tax on the dividends if you are a foreign investor. I'm looking for ETFs domiciled in the US that do not distribute gains but I ...
dgolive's user avatar
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Finding or calculating rate of return with reinvestment?

How can I find the rate of return from an investment, including both capital gains when I sell it and dividends it paid while I held it? Ideally, the answer should include the case where some or all ...
ricardoreich's user avatar
4 votes
2 answers
648 views

How is the average return rate of the S&P 500 annual return calculated?

I am trying to understand where the famous average return rate of about 10% of the S&P 500 comes from. In most conversations, the usual starting date is on 1965. Its averaging closing value at ...
Patrick.B's user avatar
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2 answers
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Price on dividend reinvestment

I started doing dividend re-investment and as my spouse's brokerage account was at a different brokerage, so I noticed the different price for same ETF e.g. QQQ. One of the brokerage gave reinvestment ...
puzzled's user avatar
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16 votes
7 answers
4k views

If an investor does not need an income stream, do dividend stocks have advantages over non-dividend stocks?

My limited understanding is that a stock's share price typically goes down on its ex-dividend date by the amount of the dividend. If that's true, why are dividend equities generally considered good ...
End Anti-Semitic Hate's user avatar
1 vote
0 answers
36 views

Dividend impact on accumulating inverse ETFs

This is a pretty straightforward clarification question. For inverse ETFs tracking an index which are tagged as "accumulating", what this actually means is that we are not tracking the ...
Daneel Olivaw's user avatar
12 votes
1 answer
1k views

How can stockbrokers be so cheap in the U.S.?

How do stockbrokers in the U.S. manage to be so cheap? In Germany, I know a few brokers but at most of them, the cost of an order is over 5€ (approx. 6$) every time. In the states, you have brokers ...
snenson's user avatar
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Why don't all dividend-yielding companies offer dividend reinvestment plans (DRIPs)?

My uneducated guess is that dividend reinvestments seem to be a win-win situation between companies and shareholders. As a result, I wonder why some dividend-yielding companies do not offer dividend ...
Franck Dernoncourt's user avatar
1 vote
3 answers
458 views

If an ETF directly reinvests its money back in to itself, does the "compound interest" approach to shares still apply?

The idea of investing in ETFs was given to me as follows, I'll call this the "compound interest approach": Historically speaking, unless you can time the market very well or have a very ...
J. Mini's user avatar
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1 answer
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If an investor wants to reinvest dividends, aren't stock dividends better than cash dividends?

When a company pays a cash dividend, the shareholders may need to pay income tax on that dividend. If a shareholder always wishes to reinvest the dividends, cash dividends have a few disadvantages: ...
Flux's user avatar
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17 votes
5 answers
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If your plan is to reinvest dividends, wouldn't you rather the company not pay dividends altogether?

Case 1: XYZ pays a dividend. We reinvest all dividends back into XYZ Case 2: XYZ does not pay a dividend In Case 1, you end up with more shares of XYZ than Case 2, but the shares will be worth less ...
PacoK's user avatar
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0 answers
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Tracking inconsistency in FX-hedged accumulating ETF

I am looking at historical data for the iShares S&P 500 GBP Hedged UCITS ETF (Acc) Exchange Traded Fund (ETF), with Epic ID IGUS. The objective of the ETF is to track the performance of the S&...
Daneel Olivaw's user avatar
4 votes
2 answers
322 views

Does dividend reinvesting influence the price?

A dividend paying asset pays a dividend on a specific date. When brokerages auto-reinvest these proceeds (DRIP), won't that influence the price (assuming that it's a market order)? In other words, ...
brt's user avatar
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3 votes
2 answers
563 views

If a bond index fund's income is re-invested, how can it be a fixed income asset?

Looking at a bond index fund Key Investor Information, I have found this: Income from the Fund will be reinvested and reflected in the price of shares in the Fund I don't fully understand it. As ...
Martel's user avatar
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1 vote
2 answers
178 views

How do ETF commissions work?

Let's suppose that I live in the UK, and that I have £10000 invested in Vanguard's VUSA. This ETF has an ongoing charge of 0.07%. This, added to the 0.15% account fee, it's a 0.22% total. That means ...
Martel's user avatar
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Is there a UK investment brokerage allowing purchase of fractional shares / dividend reinvestment with low fees? [closed]

I am a UK resident looking for a stocks and shares brokerage for long-term value-investing. I am currently working with limited money for investing so am saving until I can buy complete stocks using ...
Ashley Reid's user avatar
1 vote
3 answers
4k views

How much money do I need to generate $1500 per month in dividends for the rest of my life? [duplicate]

I am 29 years old. I do freelance work and I can save around $500/Month from that. In my country, $1500/month is more than enough to cover all living/health/entertainment expenses for me and possibly ...
samouray's user avatar
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1 vote
1 answer
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Shares bought in a dividend reinvestment plan, where do they come from?

I just received a notice that my dividend was used to purchase and additional 5 shares in the the ETF. Since there are only a limited amount of trade-able units, where did these additional 5 come ...
Darren rogers's user avatar
0 votes
2 answers
249 views

How inflation affects returns and dividends

How inflation is linked to returns AND dividends? We know that adj returns are (1+return)/(1+inflation) -1 But how do we account for dividends? Suppose: 10% annual return 3% inflation 4% dividend ...
Saverio's user avatar
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1 answer
2k views

Does reinvesting dividends after selling for a loss cause a wash sale? [duplicate]

I sold some fund shares with high turnover on my personal investment account with the intent of buying something similar later on my IRA account. However, after I sold (and within 30 days), I ...
BLaZuRE's user avatar
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1 answer
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Dividend from ESOP to Cash - India

I'm Indian and working for a US organisation in India. I have been investing in the Employee Stock Purchase Plan (ESPP) for a while now. During the initial investment period, I had not opted for re-...
Joko's user avatar
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2 votes
2 answers
531 views

How to chart what a mutual fund or ETF will return if dividends are reinvested?

When looking at financial charts like bigcharts.com, the chart shows closing price (or OHLC) for each day. This shows growth (or decline) of the equity if dividends are not reinvested. But what if ...
End Anti-Semitic Hate's user avatar
0 votes
2 answers
655 views

Do SPY prices include dividends?

I'd like to calculate the return of SPY over a range of time. For example: 5/1/18: 264.98 9/14/18: 290.88 264.98 - 290.88 = 25.9 25.9/264.98= 0.0977 = 9.77% Does the 9.77% return include SPY ...
4thSpace's user avatar
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1 vote
3 answers
236 views

Keeping track of "out of pocket" cost basis

Dilemma I have some criticism about the cost basis reported on brokerage websites. It isn't your out-of-pocket cost basis. It accounts for reinvested dividends. As a result, the gain/loss number ...
JoJo's user avatar
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7 votes
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What do mutual funds do with the dividends that the securities that they contain give out?

For example, Vanguard Dividend funds have a lot of stocks that give out dividends. Are there any regulatory requirements for Vanguard to distribute the fund? Can they decide to do whatever they want ...
unj2's user avatar
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2 votes
1 answer
533 views

DRIP Vs. Cash Dividend in a taxable account - Which one is beneficial from the tax perspective?

I believe dividends are considered as an income and if you reinvest using DRIP it won't be income but capital gain later when you sell the stock? What are some advantages and disadvantages of doing ...
Connect The Dots's user avatar
1 vote
1 answer
93 views

Indian Mutual Funds

I am new to Stock Markets. I have interests to invest my savings on Mutual Funds. When I looking for Higher Return Mutual Fund securities, I have seen some information there. For Example, I am ...
Smith Dwayne's user avatar
1 vote
2 answers
1k views

Why is there less buzz around IEP (Carl Icahn) than BRK.B (Warren Buffett)?

IEP is 95% owned by Carl Icahn. It most certainly passes the Skin in the Game principle Nassim Taleb likes to talk about. I happen to own a couple of shares in it because of the man's incredible ...
YellowEagle's user avatar
0 votes
1 answer
41 views

Is high liquidity required to fulfill DRIPs?

With DRIPs you get equity instead of cash, but where is this equity coming from? If it's from the existing market then what happens in low liquidity situations?
Sparkler's user avatar
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2 votes
0 answers
187 views

What does "No Sweep" Mean in Citibank Context

I am in the process of opening Traditional IRA account with Citibank (currently have checking and saving account at Citibank) Purpose is to purchase ETF for long-term. Form has section to determine ...
Rhonda's user avatar
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5 votes
1 answer
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Are DRIPs subject to a settlement period?

Are DRIPs subject to a settlement period (e.g. T+2)? Does the answer depend on whether the dividend reinvestment accounts for complete shares vs only fractional shares? Are there any time ...
arcyqwerty's user avatar
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7 votes
2 answers
2k views

How to automatically reinvest in non-dividend paying funds

I've read Einsteins quote stating "The most powerful force in the universe is compound interest." However, everywhere I read this is basically only possible with dividend paying stocks and then ...
Markinson's user avatar
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24 votes
5 answers
6k views

Dividends - Why the push to reinvest?

I recently received an email from my brokerage (UK based) stating: "Research from Barclays shows that without dividends, £100 invested in the UK stock market since 1899 would have grown into just £...
seekingknowledge's user avatar
4 votes
4 answers
3k views

Dividend vs Growth Stocks for young investors

I am a young investor (24 yo) with a stable income and would like to know which long-term investment plan would be more appropriate for people around my age and why: Growth Stocks or Dividend Growth ...
deadpixels's user avatar
-1 votes
1 answer
275 views

Meaning of reinvestment

Is it correct that stocks and mutual funds can distribute dividends and capital gains automatically without account holders' intervention, and then reinvest the distributed to buy new shares? From ...
Tim's user avatar
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5 votes
1 answer
1k views

Missing 401(k) dividends

I have a 401(k) with a gigantic, global, US-based company. The funds available to me include a variety of non-tickered funds — meaning that there's no symbol I can independently research — such as ...
InbetweenWeekends's user avatar
2 votes
4 answers
3k views

What is the difference between a scrip dividend and a stock split?

Definitions of both scrip dividend and share split gives the same meaning. What is the difference between a scrip dividend and share splits?
Dharshana Jayasekera's user avatar
9 votes
5 answers
22k views

ETF S&P 500 with Reinvested Dividend [closed]

All ETFs tracking the S&P 500 Index I know (SPY, VOO, IVV) pay dividends several times per years. Is there any ETF that tracks the S&P 500 Index but instead of paying dividends they reinvest ...
user246185's user avatar
2 votes
1 answer
166 views

Taxes on qualifying dividends when reinvesting

I put all my investment money in a managed account with Chase Private. The account is set up to reinvest all dividends, capital gain distributions and interests my stocks/mutual funds/treasury funds ...
user180940's user avatar
1 vote
1 answer
2k views

Are automatic Dividend Reinvestments (DRIPs) subject to Redemption Fees?

It's the end of 2015, and most mutual funds are paying out their annual dividends, which I have enrolled in DRIPs (dividend reinvestment programs). Since a "DRIP" transaction is similar to purchasing ...
Mike's user avatar
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2 votes
1 answer
133 views

Why do dividend reinvestments not match my calculator?

I've seen this occur numerous times in my IRAs. In the transaction section of my Fidelity IRA, it shows a line item Reinvestment XXX with a dollar amount. Clicking the details will display the ...
InbetweenWeekends's user avatar
1 vote
1 answer
192 views

Selling non-dividend for dividend stocks

H all, Few years ago , I received from my previous employer several hundred RSU, all managed by ETrade. since then all have already got Vested. I never sold neither bought any, in other words, I ...
snoofkin's user avatar
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2 votes
1 answer
225 views

Can a dividend reinvestment plan (DRIP) and share purchase plan (SPP) be used with a TFSA?

Can I put Sun Life (SLF) shares into a dividend reinvestment plan (DRIP) and share purchase plan (SPP) plan, and then put into a TFSA investment account for a family member, 5 to 10 year term?
Fred Allen's user avatar
5 votes
3 answers
317 views

Wouldn't it be better if reinvested dividends were simply treatable as capital gains for tax purposes?

Suppose I own 100 shares in XYZ corp purchased for 25c in year 2000. If XYZ corp pays me 5c in dividends in year 2001, I will owe tax on the 5c dividends, hopefully as qualified dividends(?). If on ...
Tim Lovell-Smith's user avatar
2 votes
2 answers
193 views

Index ETF or Index mutual fund - standard brokerage account

If I plan to hold an asset for 10 years, the asset is offered as a mutual fund and an etf, with the same 0.25% fee, and quarterly dividends of 100.00, from a tax and reinvestment standpoint, which ...
pyInTheSky's user avatar
1 vote
1 answer
83 views

Is there a way to avoid short-term capital gains taxes on bond funds?

It appears that most bond ETFs pay out monthly distributions from interest earnings. Is there a way to directly reinvesting the earnings on the fund without triggering a taxable event? Are there any ...
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