Why no Dividend?

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Oak&Elm
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Why no Dividend?

Post by Oak&Elm » Tue Dec 24, 2019 8:00 pm

I made a trade and purchased VTSAX (Vanguard TSM) on 12/10 and it settled on 12/11. I assumed I would be getting the December dividend but it now appears that is not the case. Just curious where to find the info on the ex dividend date for Vanguard funds

stilllurking
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Re: Why no Dividend?

Post by stilllurking » Tue Dec 24, 2019 8:03 pm

Click on distributions from this link.

https://investor.vanguard.com/mutual-fu ... ions/vtsax

livesoft
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Re: Why no Dividend?

Post by livesoft » Tue Dec 24, 2019 8:05 pm

You got the dividend, but you haven't found out what happened to it yet. Specifically, what did you tell (or not tell) Vanguard to do with your dividend?
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Oak&Elm
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Re: Why no Dividend?

Post by Oak&Elm » Tue Dec 24, 2019 8:09 pm

Thanks, just checked and the record date is 12/20 and my trade date was 12/10, ten days prior to the record date. That’s why I’m wondering why no dividend, maybe it will come in tomorrow but my other VG accounts are already showing the VTSAX dividends. This is my taxable brokerage account

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Re: Why no Dividend?

Post by Oak&Elm » Tue Dec 24, 2019 8:11 pm

I told Vanguard to deposit the dividend into my settlement account, maybe it will be there tomorrow

Geologist
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Re: Why no Dividend?

Post by Geologist » Tue Dec 24, 2019 8:23 pm

Oak&Elm wrote:
Tue Dec 24, 2019 8:09 pm
Thanks, just checked and the record date is 12/20 and my trade date was 12/10, ten days prior to the record date. That’s why I’m wondering why no dividend, maybe it will come in tomorrow but my other VG accounts are already showing the VTSAX dividends. This is my taxable brokerage account
The record date is 12/20, but the payable date is 12/24. I'll bet the account updates overnight and you will see it tomorrow.

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Re: Why no Dividend?

Post by Oak&Elm » Tue Dec 24, 2019 8:54 pm

Yes, it will likely show up tomorrow, just odd why it already is posted in my Roth account, anyhow just curious...merry Christmas everyone

dropdx
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Re: Why no Dividend?

Post by dropdx » Tue Dec 24, 2019 8:55 pm

I'm missing a VTSAX dividend for one of my accounts too. I received it for my other accounts, and I received all my VTIAX dividends.

I figured I'd wait a few days to see if it shows up. I don't really understand why this is, but I'm sure there's a reason.
Last edited by dropdx on Tue Dec 24, 2019 9:06 pm, edited 1 time in total.

WolfgangPauli
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Re: Why no Dividend?

Post by WolfgangPauli » Tue Dec 24, 2019 8:59 pm

Just out of curiosity, why did you do that? I was always told (by Vanguard) to ensure you do not "buy" the dividend. My understanding of this process is the following (all numbers are made up):

1. You buy $1000 worth of VTSAX a few days before the dividend
2. VTSAX pays a $10 dividend. The value of VTSAX drops by $10 to $990 and they return $10 to you as a dividend.

At this point you are break even.. except.. .

You now owe taxes on the $10 they gave back to you.

I am sure I am missing something but over the years there have always been big warnings all over the Vanguard site warning people to not buy the dividend for tax reasons.

I have auto buys made at the beginning of every month except on the dividend months which I wait until after the dividend is paid to make my buy.

Thoughts?
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Re: Why no Dividend?

Post by ruud » Tue Dec 24, 2019 10:14 pm

WolfgangPauli wrote:
Tue Dec 24, 2019 8:59 pm
Thoughts?
If it's a day or two before the dividend, I'd agree, but 10 days? The amount of market appreciation missed-out-on in ten days could easily be well more than the taxes owed on the dividend. Don't let the (tax) tail wag the (total return) dog.
.

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Re: Why no Dividend?

Post by Oak&Elm » Wed Dec 25, 2019 6:21 am

As for why I bought the dividend... I had a individual muni bond mature and have been adding stock in my brokerage account, I read a couple threads on buying close to a distribution and there were good points on both sides, I went with the time in the market logic. Btw my dividend came in overnight, it was a nice chunk of change. Merry Christmas

UpperNwGuy
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Re: Why no Dividend?

Post by UpperNwGuy » Wed Dec 25, 2019 6:52 am

My VTSAX dividend showed up this morning, too.

WolfgangPauli
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Re: Why no Dividend?

Post by WolfgangPauli » Wed Dec 25, 2019 7:36 am

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student
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Re: Why no Dividend?

Post by student » Wed Dec 25, 2019 7:46 am

Mine showed up Dec 23.

livesoft
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Re: Why no Dividend?

Post by livesoft » Wed Dec 25, 2019 9:36 am

So why do some folks see a dividend or not? I wonder if it is where they are looking on the Vanguard.com web site, where in their account pages, and/or whether they have their dividend re-invested or not?

There are several different places on Vanguard.com where one might see evidence of a dividend such as the Activities, the other Activities, the Transactions, the other Transactions, Balances, Balances & Holdings, and so on. Also when a dividend is in-between two places, then I think Vanguard.com does not give one any idea of a pending transaction.

Or perhaps Vanguard in an effort save costs for electricity shuts down its computers before everyone's accounts are updated. Some folks have to wait until some Vanguard employees come back to work and finish things up.
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Re: Why no Dividend?

Post by MathIsMyWayr » Wed Dec 25, 2019 10:12 am

WolfgangPauli wrote:
Tue Dec 24, 2019 8:59 pm
I was always told (by Vanguard) to ensure you do not "buy" the dividend.
1. You buy $1000 worth of VTSAX a few days before the dividend
2. VTSAX pays a $10 dividend. The value of VTSAX drops by $10 to $990 and they return $10 to you as a dividend.

At this point you are break even.. except.. .

You now owe taxes on the $10 they gave back to you.
Since buying a stock just before dividend is not desirable because of tax on it if applicable, why isn't a stock discounted due to a small imbalance between supply and demand?

MidwestMike
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Re: Why no Dividend?

Post by MidwestMike » Wed Dec 25, 2019 10:14 am

I have VCR in both my Roth and taxable accounts. In my taxable account I do not automatically reinvest the dividend. I usually add to it and rebalance. Anyway, the cash dividend displayed a half hour before the market opened on the payable date. In my Roth the dividend is automatically reinvested. It displayed as the reinvested shares the following day.

livesoft
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Re: Why no Dividend?

Post by livesoft » Wed Dec 25, 2019 10:18 am

MathIsMyWayr wrote:
Wed Dec 25, 2019 10:12 am
Since buying a stock just before dividend is not desirable because of tax on it if applicable, why isn't a stock discounted due to a small imbalance between supply and demand?
Because there is in reality no tax incurred when these things are bought in a tax-advantaged account like 401(k), 403(b), Roth, IRA, etc.
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UpperNwGuy
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Re: Why no Dividend?

Post by UpperNwGuy » Wed Dec 25, 2019 10:20 am

livesoft wrote:
Wed Dec 25, 2019 9:36 am
So why do some folks see a dividend or not? I wonder if it is where they are looking on the Vanguard.com web site, where in their account pages, and/or whether they have their dividend re-invested or not?

There are several different places on Vanguard.com where one might see evidence of a dividend such as the Activities, the other Activities, the Transactions, the other Transactions, Balances, Balances & Holdings, and so on. Also when a dividend is in-between two places, then I think Vanguard.com does not give one any idea of a pending transaction.

Or perhaps Vanguard in an effort save costs for electricity shuts down its computers before everyone's accounts are updated. Some folks have to wait until some Vanguard employees come back to work and finish things up.
I always check the Transactions section.

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Re: Why no Dividend?

Post by Dottie57 » Wed Dec 25, 2019 10:21 am

Oak&Elm wrote:
Tue Dec 24, 2019 8:09 pm
Thanks, just checked and the record date is 12/20 and my trade date was 12/10, ten days prior to the record date. That’s why I’m wondering why no dividend, maybe it will come in tomorrow but my other VG accounts are already showing the VTSAX dividends. This is my taxable brokerage account
Was it reinvested into the fund? Your choice as to what happens.

MotoTrojan
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Re: Why no Dividend?

Post by MotoTrojan » Wed Dec 25, 2019 11:03 am

Oak&Elm wrote:
Tue Dec 24, 2019 8:54 pm
Yes, it will likely show up tomorrow, just odd why it already is posted in my Roth account, anyhow just curious...merry Christmas everyone
Was your Roth set to auto re-invest? That comes faster.

MidwestMike
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Re: Why no Dividend?

Post by MidwestMike » Wed Dec 25, 2019 11:18 am

MotoTrojan wrote:
Wed Dec 25, 2019 11:03 am
Oak&Elm wrote:
Tue Dec 24, 2019 8:54 pm
Yes, it will likely show up tomorrow, just odd why it already is posted in my Roth account, anyhow just curious...merry Christmas everyone
Was your Roth set to auto re-invest? That comes faster.
Mine came slower. See my previous post in this thread.

livesoft
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Re: Why no Dividend?

Post by livesoft » Wed Dec 25, 2019 11:31 am

MidwestMike wrote:
Wed Dec 25, 2019 11:18 am
Mine came slower. See my previous post in this thread.
This is strictly because reinvesting ETF dividends is quite a bit different than reinvesting mutual fund dividends. With an ETF dividend, the brokerage sets its rules for when/how the dividend is reinvested. Generally, the ETF dividends at Vanguard are reinvested on the day after the payable date at the opening cross of market. Fidelity does something different. TDAmeritrade does something different from both Vanguard and Fidelity. I can manually reinvest ETF dividends faster than both Vanguard and TDAmeritrade.

See also: Case Study: Broker speed of dividends payments

As for MidwestMike, I think those ETF dividends came on the payable date published on the ETF's web site, but since one was auto-reinvested that happened the next morning. Vanguard and others where one auto-reinvests ETF dividends do not put a "pending auto-reinvesting" in one's account.
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livesoft
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Re: Why no Dividend?

Post by livesoft » Wed Dec 25, 2019 11:43 am

So one can make a little matrix with a minimum of 6 possibilities that could actually be 6 different dates:

Code: Select all

Six different reasons for different dividend payment dates
                                                 Mutual fund            ETF
Auto-reinvest                                          1                 2
Paid to account at broker                              3                 4
Paid to external account like checking account         5                 6
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Phineas J. Whoopee
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Re: Why no Dividend?

Post by Phineas J. Whoopee » Wed Dec 25, 2019 11:58 am

livesoft wrote:
Wed Dec 25, 2019 10:18 am
MathIsMyWayr wrote:
Wed Dec 25, 2019 10:12 am
Since buying a stock just before dividend is not desirable because of tax on it if applicable, why isn't a stock discounted due to a small imbalance between supply and demand?
Because there is in reality no tax incurred when these things are bought in a tax-advantaged account like 401(k), 403(b), Roth, IRA, etc.
It's best to remember all the institutional investors out there, as well. They have a lot of assets. Many, like for example pension funds, don't pay income tax (although the people who eventually receive the bulk of the pension payments do).

PJW

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Re: Why no Dividend?

Post by Oak&Elm » Wed Dec 25, 2019 12:04 pm

I use several ways to confirm when my dividend has been paid,
1, transaction activity
2, available balance when not reinvesting- shows up in settlement account
3, increase in shares if reinvesting - yes I keep track

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Re: Why no Dividend?

Post by grabiner » Wed Dec 25, 2019 12:36 pm

WolfgangPauli wrote:
Tue Dec 24, 2019 8:59 pm
Just out of curiosity, why did you do that? I was always told (by Vanguard) to ensure you do not "buy" the dividend. My understanding of this process is the following (all numbers are made up):

1. You buy $1000 worth of VTSAX a few days before the dividend
2. VTSAX pays a $10 dividend. The value of VTSAX drops by $10 to $990 and they return $10 to you as a dividend.

At this point you are break even.. except.. .

You now owe taxes on the $10 they gave back to you.

I am sure I am missing something but over the years there have always been big warnings all over the Vanguard site warning people to not buy the dividend for tax reasons.
In an IRA or 401(k), there is no cost.

But even in a taxable account, the cost is trivial for a fund with quarterly dividends and no capital gain distributions. A typical dividend for Total Stock Market is 0.5%, so a $10,000 investment would pay a $50 dividend. The dividend is almost all qualified, so the tax on that dividend is $8. You expect to lose $8 by staying out of the market for a week to avoid the dividend.

It is worth waiting a few weeks to avoid a large distribution, such as a capital gain (but you usually don't want to hold such funds in a taxable account anyway) or an annual dividend.
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Re: Why no Dividend?

Post by grabiner » Wed Dec 25, 2019 12:44 pm

MathIsMyWayr wrote:
Wed Dec 25, 2019 10:12 am
Since buying a stock just before dividend is not desirable because of tax on it if applicable, why isn't a stock discounted due to a small imbalance between supply and demand?
The effect would be trivial, because it affects very few investors. Tax-exempt investors are unaffected. Mutual funds, and many other managers of other people's money, are usually evaluated on pre-tax rather than after-tax performance, and thus do not care about creating a tax bill. Long-term investors who already hold the stock will not sell to avoid the dividend. Short-term investors do not care about paying tax on the dividend, because they plan to sell anyway and will get the money back from a reduced capital gain. So it is only investors who are planning to buy a stock, and hold it for years, who care about avoiding a dividend by timing purchases. ETFs have even shorter average holding periods than stocks, so most ETF investors do not care about dividends.

It would not affect the prices of mutual funds at all, because mutual funds are priced at net asset value. The net asset value per share of a mutual fund does not change if an investor buys shares after the dividend date.
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Re: Why no Dividend?

Post by MathIsMyWayr » Wed Dec 25, 2019 1:07 pm

grabiner wrote:
Wed Dec 25, 2019 12:44 pm
MathIsMyWayr wrote:
Wed Dec 25, 2019 10:12 am
Since buying a stock just before dividend is not desirable because of tax on it if applicable, why isn't a stock discounted due to a small imbalance between supply and demand?
The effect would be trivial, because it affects very few investors. Tax-exempt investors are unaffected. Mutual funds, and many other managers of other people's money, are usually evaluated on pre-tax rather than after-tax performance, and thus do not care about creating a tax bill. Long-term investors who already hold the stock will not sell to avoid the dividend. Short-term investors do not care about paying tax on the dividend, because they plan to sell anyway and will get the money back from a reduced capital gain. So it is only investors who are planning to buy a stock, and hold it for years, who care about avoiding a dividend by timing purchases. ETFs have even shorter average holding periods than stocks, so most ETF investors do not care about dividends.

It would not affect the prices of mutual funds at all, because mutual funds are priced at net asset value. The net asset value per share of a mutual fund does not change if an investor buys shares after the dividend date.
"Mutual funds, and many other managers of other people's money, are usually evaluated on pre-tax rather than after-tax performance, and thus do not care about creating a tax bill." Message: You are on your own. Good luck.

Gatto Bialetti
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Re: Why no Dividend?

Post by Gatto Bialetti » Wed Dec 25, 2019 3:11 pm

Still waiting for mine, too, to drop in the bank. But it's a holiday, so I wouldn't expect to see it until next business day.

VG shows the dividend paid, but Schwab the bank doesn't work on holidays.

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GerryL
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Re: Why no Dividend?

Post by GerryL » Wed Dec 25, 2019 3:32 pm

Checked all my quarterly earnings yesterday. The amounts showed up on different screens based on whether they were retirement/non-retirement accts and/or reinvested/not reinvested.

As I scanned all the gains to my Vanguard accts, I realized that my quarterly earnings added up to more than I used to make annually as a staff sergeant in the USAF. Of course, that was 40 years ago, but it provides some perspective. (I also look back and think about my mother's cognitive health 30 years ago, when she was the age I am now. So far, so good.)

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Re: Why no Dividend?

Post by livesoft » Wed Dec 25, 2019 4:15 pm

Gatto Bialetti wrote:
Wed Dec 25, 2019 3:11 pm
VG shows the dividend paid, but Schwab the bank doesn't work on holidays.
Apparently, Wells Fargo does:
Image
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Gatto Bialetti
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Re: Why no Dividend?

Post by Gatto Bialetti » Wed Dec 25, 2019 4:46 pm

Schwab doesn't show pending transactions like that one.

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Re: Why no Dividend?

Post by Gatto Bialetti » Thu Dec 26, 2019 12:48 pm

New day, there's the ACH from VG.

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