Vanguard ETF dividends?

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dmcmahon
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Vanguard ETF dividends?

Post by dmcmahon »

Anyone know when they're supposed to be paid? I need to buy some shares but don't want to buy a distribution.
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jhfenton
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Re: Vanguard ETF dividends?

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dmcmahon
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Re: Vanguard ETF dividends?

Post by dmcmahon »

Thanks. Um...what exactly is a "declaration date"?
livesoft
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Re: Vanguard ETF dividends?

Post by livesoft »

:) That link shows the declaration date which to me is the date that the amount of the dividend will be made known and also the date when the shares start to trade ex-dividend will be made known. That is, the declaration date is not necessarily the ex-dividend date, so watch out.

For each ETF you wish to purchase, check out its distributions tab. For example,
https://personal.vanguard.com/us/funds/ ... =INT#tab=4

If you buy VOO today, you will not be buying the dividend and will not get the dividend. Note that the declaration date was June 18, but the ex-dividend date was June 22.

Furthermore, Vanguard is not quick to update its web site, so if declaration date is June 24 (today), the web site will probably not be updated until 2 am overnight tonight with new info on the distributions tabs.
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InvestorNewb
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Re: Vanguard ETF dividends?

Post by InvestorNewb »

Why are the dividend rates for VOO showing and not the other ETFs? I checked the ones in my sig...
My Portfolio: VTI [US], VXUS [Int'l], VNQ [REIT], VCN [Canada] (largest to smallest)
livesoft
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Re: Vanguard ETF dividends?

Post by livesoft »

InvestorNewb wrote:Why are the dividend rates for VOO showing and not the other ETFs? I checked the ones in my sig...
Check your watch (or smartphone). Is it 2 am eastern time yet?

(Edit: Time marches on, so now the info is available. :) )
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InvestorNewb
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Re: Vanguard ETF dividends?

Post by InvestorNewb »

livesoft wrote:
InvestorNewb wrote:Why are the dividend rates for VOO showing and not the other ETFs? I checked the ones in my sig...
Check your watch (or smartphone). Is it 2 am eastern time yet?

(Edit: Time marches on, so now the info is available. :) )
Yep - I see they are out now. Sweet. Much better than the first quarter too.
My Portfolio: VTI [US], VXUS [Int'l], VNQ [REIT], VCN [Canada] (largest to smallest)
Frugalman
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Re: Vanguard ETF dividends?

Post by Frugalman »

InvestorNewb wrote:
livesoft wrote:
InvestorNewb wrote:Why are the dividend rates for VOO showing and not the other ETFs? I checked the ones in my sig...
Check your watch (or smartphone). Is it 2 am eastern time yet?

(Edit: Time marches on, so now the info is available. :) )
Yep - I see they are out now. Sweet. Much better than the first quarter too.

Maybe I am misunderstanding dividends. Why do you consider a higher dividend payout to be "sweet"? Doesn't that mean more taxes owed at the end of the year?
dbr
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Re: Vanguard ETF dividends?

Post by dbr »

Frugalman wrote:
InvestorNewb wrote:
livesoft wrote:
InvestorNewb wrote:Why are the dividend rates for VOO showing and not the other ETFs? I checked the ones in my sig...
Check your watch (or smartphone). Is it 2 am eastern time yet?

(Edit: Time marches on, so now the info is available. :) )
Yep - I see they are out now. Sweet. Much better than the first quarter too.

Maybe I am misunderstanding dividends. Why do you consider a higher dividend payout to be "sweet"? Doesn't that mean more taxes owed at the end of the year?
I agree that feeling rewarded by collecting a dividend is a behavioral error. That does not mean that the paying of dividends is not significant to the overall success of the commercial economy, nor does it mean that one should select investments to avoid dividends in most cases.
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InvestorNewb
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Re: Vanguard ETF dividends?

Post by InvestorNewb »

Frugalman wrote:
InvestorNewb wrote:
livesoft wrote:
InvestorNewb wrote:Why are the dividend rates for VOO showing and not the other ETFs? I checked the ones in my sig...
Check your watch (or smartphone). Is it 2 am eastern time yet?

(Edit: Time marches on, so now the info is available. :) )
Yep - I see they are out now. Sweet. Much better than the first quarter too.

Maybe I am misunderstanding dividends. Why do you consider a higher dividend payout to be "sweet"? Doesn't that mean more taxes owed at the end of the year?
It does mean more taxes owed, but it also means that I have money to buy more shares. If you constantly reinvest dividends over a long time horizon, think about how many shares you can accumulate. Every new share that you buy will pay a dividend so they compound and the total paid to you will get progressively higher over time. My long term plan is to keep buying shares, not touch the principle, and eventually be able to use the dividends for spending in retirement.
My Portfolio: VTI [US], VXUS [Int'l], VNQ [REIT], VCN [Canada] (largest to smallest)
Frugalman
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Re: Vanguard ETF dividends?

Post by Frugalman »

InvestorNewb wrote:
Frugalman wrote:
InvestorNewb wrote:
livesoft wrote:
InvestorNewb wrote:Why are the dividend rates for VOO showing and not the other ETFs? I checked the ones in my sig...
Check your watch (or smartphone). Is it 2 am eastern time yet?

(Edit: Time marches on, so now the info is available. :) )
Yep - I see they are out now. Sweet. Much better than the first quarter too.

Maybe I am misunderstanding dividends. Why do you consider a higher dividend payout to be "sweet"? Doesn't that mean more taxes owed at the end of the year?
It does mean more taxes owed, but it also means that I have money to buy more shares. If you constantly reinvest dividends over a long time horizon, think about how many shares you can accumulate. Every new share that you buy will pay a dividend so they compound and the total paid to you will get progressively higher over time. My long term plan is to keep buying shares, not touch the principle, and eventually be able to use the dividends for spending in retirement.
Yes, you have more shares. But they are worth less than the day before, no? You're economic position didn't change with the dividend payout. Am I missing something?
dbr
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Re: Vanguard ETF dividends?

Post by dbr »

InvestorNewb wrote: It does mean more taxes owed, but it also means that I have money to buy more shares. If you constantly reinvest dividends over a long time horizon, think about how many shares you can accumulate. Every new share that you buy will pay a dividend so they compound and the total paid to you will get progressively higher over time. My long term plan is to keep buying shares, not touch the principle, and eventually be able to use the dividends for spending in retirement.
It would be obvious that if you withdraw money from your portfolio and spend it that you won't have the increase you would have if you leave all the return to compound. That part of the return that is delivered as dividends must be actively reinvested or you lose those increases. It would be better to regard the reinvesting of dividends as a necessary chore with a possible tax penalty than as an opportunity. The idea of not touching the principal is a misconception. What is of more concern is to be sure you don't touch the return.
livesoft
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Re: Vanguard ETF dividends?

Post by livesoft »

More insidious is that the taxes that one pays on dividends means there is less money to buy new shares. :twisted: Since the tax money was often not in the investment account to begin with and usually comes from some place completely disconnected from the investment account, one doesn't attribute the taxes on dividends as a drag on performance. Insidious, indeed!
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grabiner
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Re: Vanguard ETF dividends?

Post by grabiner »

InvestorNewb wrote:
Frugalman wrote:
InvestorNewb wrote:Yep - I see they are out now. Sweet. Much better than the first quarter too.
Maybe I am misunderstanding dividends. Why do you consider a higher dividend payout to be "sweet"? Doesn't that mean more taxes owed at the end of the year?
It does mean more taxes owed, but it also means that I have money to buy more shares. If you constantly reinvest dividends over a long time horizon, think about how many shares you can accumulate. Every new share that you buy will pay a dividend so they compound and the total paid to you will get progressively higher over time. My long term plan is to keep buying shares, not touch the principle, and eventually be able to use the dividends for spending in retirement.
The problem is that "shares" aren't something of value; they are just the size of pieces that the fund decided to divide itself into. The value of holding a stock fund comes from the corporations that those shares represent, and the dividend reduces how much of a corporation each share is.

Suppose that a fund has 100 million shares, each worth $101. The fund owns $10.1B in stock. Then, it distributes a $1 dividend per share, and investors choose to reinvest these dividends. There are now 101 million shares of the fund, each worth $100, and the fund owns the same $10.1B in stock. Nobody is any better or worse off, except for the tax they will pay on that $1 (if they didn't hold the fund in an IRA). Investors do have more shares, but each share now holds less stock.
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