Watching for Dividend Ex-Date - any tips?

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PalmQueen
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Watching for Dividend Ex-Date - any tips?

Post by PalmQueen » Thu Sep 20, 2018 12:39 pm

Hello -
I want to purchase shares of an ETF shortly after the next dividend payment.
It historically pays dividends quarterly, so expect next to be sometime before the end of September.
Is there a way to track this other than pulling up the ticker daily and looking at dividend history?
Many thanks!

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ReformedSpender
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Re: Watching for Dividend Ex-Date - any tips?

Post by ReformedSpender » Thu Sep 20, 2018 12:49 pm

Market history shows that when there's economic blue sky, future returns are low, and when the economy is on the skids, future returns are high. The best fishing is done in the most stormy waters.

The Wizard
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Re: Watching for Dividend Ex-Date - any tips?

Post by The Wizard » Thu Sep 20, 2018 12:52 pm

Or just wait for October to come. What's the rush?
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alex_686
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Re: Watching for Dividend Ex-Date - any tips?

Post by alex_686 » Thu Sep 20, 2018 1:10 pm

Not really. Funds are not obliged to pay quarterly dividends or give much of a advance notice. Actually, tax law discourages any type of announcement. Before a fund can announce a dividend they have to know exactly how much income they have earned since the last announcement. Do it wrong and you "blow up the fund". Does not matter if a underlying company all of sudden cancels a planed dividend and throws your numbers off.

The Wizard
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Re: Watching for Dividend Ex-Date - any tips?

Post by The Wizard » Thu Sep 20, 2018 1:13 pm

alex_686 wrote:
Thu Sep 20, 2018 1:10 pm
...Before a fund can announce a dividend they have to know exactly how much income they have earned since the last announcement...
I don't think this is correct...
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livesoft
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Re: Watching for Dividend Ex-Date - any tips?

Post by livesoft » Thu Sep 20, 2018 1:19 pm

Google the ticker and the word "dividend" as in:

DGS dividend

then select the FUND SPONSOR web site to look for declaration date, ex-dividend date, payout date, etc. One can look to see what dates were used in 2017. Hint: For WisdomTree, there will be a Press Release with the information as in: https://www.wisdomtree.com/about/press-room which will have the information BEFORE the WisdomTree web site is actually updated.

At least with ETFs, one will know the ex-dividend date before it happens. That's not always the case with Vanguard mutual funds.

So I guess the answer to your question is: "No, there is no other way."
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alex_686
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Re: Watching for Dividend Ex-Date - any tips?

Post by alex_686 » Thu Sep 20, 2018 1:31 pm

The Wizard wrote:
Thu Sep 20, 2018 1:13 pm
alex_686 wrote:
Thu Sep 20, 2018 1:10 pm
...Before a fund can announce a dividend they have to know exactly how much income they have earned since the last announcement...
I don't think this is correct...
It is. I used to work in mutual fund accounting and help calculate these things. If a mutual fund issues a dividend that is more than its accrued income it is no longer a mutual fund. And it has to pay out all accrued income by 12/31 of each year - but there is some wiggle room there. The IRS has a appeals and relief processes but you really don't want to go down that road.

It is a fiddly processes that starts at least 2 weeks before the expected dividend pays out.

Thesaints
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Re: Watching for Dividend Ex-Date - any tips?

Post by Thesaints » Thu Sep 20, 2018 1:38 pm

The fund can certainly pay more and reclassify the excess as "return of capital", it is paying less than may cause loss of status.
However, supplemental distributions can be made in the following year.

alex_686
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Re: Watching for Dividend Ex-Date - any tips?

Post by alex_686 » Thu Sep 20, 2018 1:56 pm

Thesaints wrote:
Thu Sep 20, 2018 1:38 pm
The fund can certainly pay more and reclassify the excess as "return of capital", it is paying less than may cause loss of status.
However, supplemental distributions can be made in the following year.
No. The only way a fund can pay out a "Return of Capital" is if one of the underlying stocks paid out a ROC.

It might help to recognize that the primary reasons why funds pay out dividends is for tax reporting, and that is all governed by IRS rules and regulations. They would really like to run more like CITs and just reinvest all of their income back into a higher NAV. About an 10% of our accounting department was just devoted to getting the amount of classification of dividends correctly. Now, this did induced such topics as PFIC, wash sales, etc. But that all got wrapped into income classification.

Thesaints
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Re: Watching for Dividend Ex-Date - any tips?

Post by Thesaints » Thu Sep 20, 2018 2:02 pm

alex_686 wrote:
Thu Sep 20, 2018 1:56 pm
No. The only way a fund can pay out a "Return of Capital" is if one of the underlying stocks paid out a ROC.
I don't think that's correct: managed payout funds can use ROC to keep distributions at their stipulated level, for instance.

alex_686
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Re: Watching for Dividend Ex-Date - any tips?

Post by alex_686 » Thu Sep 20, 2018 2:15 pm

Thesaints wrote:
Thu Sep 20, 2018 2:02 pm
I don't think that's correct: managed payout funds can use ROC to keep distributions at their stipulated level, for instance.
Can you point to one? Has the tax law been updated in the past 2 years? I remember being in too many meetings with accountants and portfolio managers debating the finer points of this issue.


alex_686
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Re: Watching for Dividend Ex-Date - any tips?

Post by alex_686 » Thu Sep 20, 2018 3:33 pm

This is interesting. I wonder how they pull it off. There is a disconcert between economic total returns and accounting income which can be exploited, plus there is the fund of funds structure. I wish I could pop off the hood and figure out how they do it.

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PalmQueen
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Re: Watching for Dividend Ex-Date - any tips?

Post by PalmQueen » Sat Sep 22, 2018 10:51 am

Thanks!
Your post inspired me to expand my online research and I came across a site with 2018 Dividend, Ex-Dividend and Paydate information for many ETFs:

I'm sharing it here in case someone else comes across this discussion looking for similar information:
https://sixfigureinvesting.com/2010/02/ ... -for-etfs/

And yes, The Wizard, I'll be waiting until October to make my purchase, so maybe your post inspired me to wonder if I have too much time on my hands. :wink:

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