Question on dividend payout calculation for pcoxx

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Topic Author
iCare
Posts: 65
Joined: Sat Dec 18, 2021 8:08 am

Question on dividend payout calculation for pcoxx

Post by iCare »

I am trying to understand dividend payout calculations. How do dividends prorate for PCOXX? can i buy it just a day before ex-dividend date and reap full month's dividend?

Let us say i have 3 trasactions for month: 1 deposit and 2 withdrawls.
Starting balance $10,000 shares.
#shares
12/1/22: 10,000
12/10/22: 12,000
12/20/22: 8,000
12/30/22: 6,000
12/31/22: dividend payout = 0.0035/share
how much dividend will be collected for the month?
Is following calculation correct: payout= $33.42
date amount held for #days dividend
12/1/2022 10000 9 $10.16
12/10/2022 12000 10 $13.55
12/20/2022 8000 10 $9.03
12/30/2022 6000 1 $0.68
12/31/2022 total payout $33.42

Or will dividend be 6000 x 0.0035 = $21

What if I sold out on 12/30/22?
What if I have 0 starting balance & i purchase 10K on 12/30/22? :oops:
Hyperchicken
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Re: Question on dividend payout calculation for pcoxx

Post by Hyperchicken »

Edit: and I was wrong for PCOXX specifically! Thanks increment. I'll leave the below original response which would still work for any "normal" fund.

***

It's very simple. "dividend payout = 0.0035/share" does exactly what is says it would do. For every share you own on record date you receive $0.0035.
Last edited by Hyperchicken on Sat Jan 21, 2023 10:18 am, edited 1 time in total.
increment
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Re: Question on dividend payout calculation for pcoxx

Post by increment »

As PCOXX is a money-market fund, it "declares any dividends daily and pays them monthly to shareholders" (quoting its prospectus). Every day is an ex-dividend date. Every month you should receive a dividend appropriately proportional to the length of time you owned it.
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indexfundfan
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Re: Question on dividend payout calculation for pcoxx

Post by indexfundfan »

The PCOXX website gives you exactly what it earns each day. The yield is different for each business day. See the "dividend factor".

https://www.federatedinvestors.com/prod ... ions/ws.do
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Topic Author
iCare
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Re: Question on dividend payout calculation for pcoxx

Post by iCare »

Thanks @increment for the link to the prospectus - I finally found good use of prospectus information :mrgreen:

Also thanks @indexfundfan for the link to the daily dividend factor. It confirms that PCOXX calculates dividends earned on a daily basis based on the number of shares held in the account on that day, and then adds them up for the entire month before making a payout at the end of the month. That must be lots of accounting to maintain! Oh well, it seems only fair...
Topic Author
iCare
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Re: Question on dividend payout calculation for pcoxx

Post by iCare »

One associated question regarding MM funds like PCOXX, which pay dividends once a month. What happens if you sell out before the end of the month? Will the dividend still be paid as cash to the account or will you lose it?
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indexfundfan
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Re: Question on dividend payout calculation for pcoxx

Post by indexfundfan »

iCare wrote: Mon Jan 23, 2023 10:40 am One associated question regarding MM funds like PCOXX, which pay dividends once a month. What happens if you sell out before the end of the month? Will the dividend still be paid as cash to the account or will you lose it?
You won't lose it. You will either be paid a few days after you sold out the entire holding or you will be paid on its regular distribution date. It depends on the fund.
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indexfundfan
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Re: Question on dividend payout calculation for pcoxx

Post by indexfundfan »

It looks like E*trade has changed the minimum investment in PCOXX from $0 to $500,000.
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