Case Study: Broker speed of dividend payments

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
User avatar
nisiprius
Advisory Board
Posts: 33907
Joined: Thu Jul 26, 2007 9:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

Re: Case Study: Broker speed of dividend payments

Post by nisiprius » Tue Dec 30, 2014 1:24 pm

livesoft, just to be clear... if I recall correctly, at this point you have failed to find any brokerage that has shown long-term consistency in treating you the way you think clients deserve to be treated. VBS doesn't have the Very Best Service, WellsTrade doesn't trade all that well, and now Fidelity is guilty of infidelity... correct?
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

stlutz
Posts: 3961
Joined: Fri Jan 02, 2009 1:08 am

Re: Case Study: Broker speed of dividend payments

Post by stlutz » Tue Dec 30, 2014 8:12 pm

... WellsTrade doesn't trade all that well...


livesoft made a negative comment about WellsTrade?

livesoft
Posts: 56366
Joined: Thu Mar 01, 2007 8:00 pm

Re: Case Study: Broker speed of dividend payments

Post by livesoft » Tue Dec 30, 2014 8:24 pm

I don't think I said that WellsTrade doesn't trade well. For instance, http://www.bogleheads.org/forum/viewtop ... 6#p1953356

I don't think Fidelity is guilty of infidelity, but I have to see what happens when my account is switched from a margin account to a cash account. I have said that my results are different from what others have reported so far. I have a transfer from Fidelity to my WF checking account in progress, so I will see how that goes.

But as you intimated at the beginning of this thread, how well a broker moves money to/from external sources & accounts is a legitimate criteria for rating them that has not typically been addressed in broker reviews.
This signature message sponsored by sscritic: Learn to fish.

stlutz
Posts: 3961
Joined: Fri Jan 02, 2009 1:08 am

Re: Case Study: Broker speed of dividend payments

Post by stlutz » Tue Dec 30, 2014 8:37 pm

But as you intimated at the beginning of this thread, how well a broker moves money to/from external sources & accounts is a legitimate criteria for rating them that has not typically been addressed in broker reviews.


+1. This thread is much more interesting than most magazine review articles. We need more threads that dig into the nitty gritty details like this.

stlutz
Posts: 3961
Joined: Fri Jan 02, 2009 1:08 am

Re: Case Study: Broker speed of dividend payments

Post by stlutz » Wed Jul 01, 2015 11:54 pm

Updating this thread w.r.t. Fidelity. In contrast to my prior experience, my dividend from one of my ETFs (USMV) which had a paydate of 6/30 did not hit my account until sometime today (7/1).

livesoft
Posts: 56366
Joined: Thu Mar 01, 2007 8:00 pm

Re: Case Study: Broker speed of dividend payments

Post by livesoft » Thu Jul 02, 2015 3:28 pm

It will be interesting to see how the dividend of VSS gets re-invested again. I have it set for auto-reinvesting at TDAmeritrade and at Vanguard and at the present time there is no indication that anything happened in these accounts.

In another account, I take the VSS dividend in cash and it was available this morning before the market opened to do whatever I wanted to with it. I could have manually re-invested in VSS today.

Folks may say, why do you care? I care because the markets are closed tomorrow and today was the last day to purchase funds before the Greek referendum which will surely change prices by the next time orders can be executed.
This signature message sponsored by sscritic: Learn to fish.

CantPassAgain
Posts: 426
Joined: Fri Mar 15, 2013 8:49 pm

Re: Case Study: Broker speed of dividend payments

Post by CantPassAgain » Thu Jul 02, 2015 4:05 pm

Anyone see their VTI dividend yet? I thought it would show up in my prime money market account yesterday morning but I still don't see it as of 4:05 pm CST.

User avatar
tfb
Posts: 7705
Joined: Mon Feb 19, 2007 5:46 pm
Contact:

Re: Case Study: Broker speed of dividend payments

Post by tfb » Thu Jul 02, 2015 4:07 pm

livesoft wrote:It will be interesting to see how the dividend of VSS gets re-invested again. I have it set for auto-reinvesting at TDAmeritrade and at Vanguard and at the present time there is no indication that anything happened in these accounts.

In another account, I take the VSS dividend in cash and it was available this morning before the market opened to do whatever I wanted to with it. I could have manually re-invested in VSS today.

Fidelity credited the VSS dividend before market opened today (7/2). They auto-reinvested at $102.44.
Harry Sit, taking a break from the forums.

livesoft
Posts: 56366
Joined: Thu Mar 01, 2007 8:00 pm

Re: Case Study: Broker speed of dividend payments

Post by livesoft » Thu Jul 02, 2015 4:13 pm

tfb wrote:Fidelity credited the VSS dividend before market opened today (7/2). They auto-reinvested at $102.44.

Thanks.

VSS traded today between $102.34 and $101.54. Where do think the $102.44 price came from? Pre-buying yesterday morning? There was some squirrelly trading at the open yesterday with very high prices only momentarily (high reported yesterday was $105.45). This suggests there might be a way to front-run Fidelity despite their dark pool. Or perhaps Fidelity is culpable in all this?

@CantPassAgain, VTI dividend showed up at WellsTrade this morning before the market opened. Experience shows that Vanguard takes a while, but since it wasn't payable until today, it would be unlikely to show up in your MM fund yesterday.
This signature message sponsored by sscritic: Learn to fish.

CantPassAgain
Posts: 426
Joined: Fri Mar 15, 2013 8:49 pm

Re: Case Study: Broker speed of dividend payments

Post by CantPassAgain » Thu Jul 02, 2015 5:20 pm

livesoft wrote:@CantPassAgain, VTI dividend showed up at WellsTrade this morning before the market opened. Experience shows that Vanguard takes a while, but since it wasn't payable until today, it would be unlikely to show up in your MM fund yesterday.


I was just going by the dates in the transaction history which have been on the last day of the quarter. I never looked too closely at the time so I didn't notice if they were back dated or not.

btenny
Posts: 4107
Joined: Sun Oct 07, 2007 6:47 pm

Re: Case Study: Broker speed of dividend payments

Post by btenny » Thu Jul 02, 2015 7:00 pm

Just looked up VYM at my two brokerages. The dividend was payable today.

WellsTrade shows the dividend in my account for VYM as of 4:30 PM west coast time.

I checked Scottrade a few minutes ago in another account and the dividend is not there as yet.

When I check older dividend payments for the same VYM in March both brokerages show the dividends was received on 3/27/15. The day that Vanguard says it was paid. So ???

User avatar
tfb
Posts: 7705
Joined: Mon Feb 19, 2007 5:46 pm
Contact:

Re: Case Study: Broker speed of dividend payments

Post by tfb » Thu Jul 02, 2015 7:34 pm

livesoft wrote:
tfb wrote:Fidelity credited the VSS dividend before market opened today (7/2). They auto-reinvested at $102.44.

Thanks.

VSS traded today between $102.34 and $101.54. Where do think the $102.44 price came from? Pre-buying yesterday morning? There was some squirrelly trading at the open yesterday with very high prices only momentarily (high reported yesterday was $105.45). This suggests there might be a way to front-run Fidelity despite their dark pool. Or perhaps Fidelity is culpable in all this?

They anticipate the dividend payment and trade on T-3 so that when the dividend comes in it coincides with the settlement for the shares bought. Maybe they use the volume-weighted average price on T-3 to determine the reinvestment price?
Harry Sit, taking a break from the forums.

livesoft
Posts: 56366
Joined: Thu Mar 01, 2007 8:00 pm

Re: Case Study: Broker speed of dividend payments

Post by livesoft » Fri Jul 03, 2015 6:25 am

tfb wrote:They anticipate the dividend payment and trade on T-3 so that when the dividend comes in it coincides with the settlement for the shares bought. Maybe they use the volume-weighted average price on T-3 to determine the reinvestment price?

Yes, thanks. I guess my peeve is that there is no way to check what Fidelity actually paid as I doubt any of this is audited by an outside independent entity. In particular, on a volatile day where a high price that occurs only for a few minutes at the open then drops could be used by Fidelity. Conversely, a low price could be used, too.

Vanguard updated my online account overnight with the info on the reinvested shares of VSS. Price was $102.11 which is not unreasonable given the 1-day price chart.

I expect TDAmeritrade to reinvest on Monday since that is my experience with auto re-investing there. That is, TDAmeritrade captures any "float".
This signature message sponsored by sscritic: Learn to fish.

pshonore
Posts: 5608
Joined: Sun Jun 28, 2009 2:21 pm

Re: Case Study: Broker speed of dividend payments

Post by pshonore » Fri Jul 03, 2015 9:18 am

I once asked the Fido folks how they reinvested dividends. Their reply:

Dividend reinvestments are priced at the average price that the security is purchased by Fidelity. This process typically results in a different reinvestment price than the price that the security is currently trading.

Fidelity pre-identifies all customers that will be reinvesting their dividend and goes to the market to purchase shares three days prior to the payable date. We purchase as many shares as possible on a best-efforts basis, determine the average share price, and reallocate these shares proportionately to the customers that are reinvesting their dividend.

livesoft
Posts: 56366
Joined: Thu Mar 01, 2007 8:00 pm

Re: Case Study: Broker speed of dividend payments

Post by livesoft » Fri Jul 03, 2015 9:55 am

^Yes, that is what has been reported before and is the same as what tfb wrote. From the 5-day intraday chart which shows prices & volume from the day Fidelity did their "best-efforts" it appears that Fidelity buys these shares in the first 5 minutes of trading. This suggests that one may want to put in a limit order to sell on such days that is 2% to 3% higher than the opening trade or at least the previous close. I am sure the HFT folks are all over this one, so one might as well be all over it, too.
This signature message sponsored by sscritic: Learn to fish.

pshonore
Posts: 5608
Joined: Sun Jun 28, 2009 2:21 pm

Re: Case Study: Broker speed of dividend payments

Post by pshonore » Fri Jul 03, 2015 3:16 pm

I bought VTI, VNQ, and VEU thru reinvestment of dividend on 7/2 which Fido probably purchased on 6/29
Here's the reinvestment price and the high and low on 6/29

Code: Select all

       price     high       low
==========================
VTI   107.67    108.50  106.65
VNQ   75.23     76.38    75.09
VEU    48.87     49.14    48.43

livesoft
Posts: 56366
Joined: Thu Mar 01, 2007 8:00 pm

Re: Case Study: Broker speed of dividend payments

Post by livesoft » Wed Jul 08, 2015 6:52 am

livesoft wrote:Vanguard updated my online account overnight with the info on the reinvested shares of VSS. Price was $102.11 which is not unreasonable given the 1-day price chart.

I expect TDAmeritrade to reinvest on Monday since that is my experience with auto re-investing there. That is, TDAmeritrade captures any "float".

And the TDAmeritrade reinvest price for VSS was $99.75 on 7/6.

So sometimes the market goes down and sometimes it goes up. For instance, VNQ (REIT index) is up quite a bit since Fidelity paid for shares to be reinvested.
This signature message sponsored by sscritic: Learn to fish.

livesoft
Posts: 56366
Joined: Thu Mar 01, 2007 8:00 pm

Re: Case Study: Broker speed of dividend payments

Post by livesoft » Sun Dec 25, 2016 9:05 am

FWIW, a few of the ETFs I hold have payable dates on Tuesday 12/27 and not earlier since Monday is a stock market holiday. Nevertheless, my WellsFargo brokerage already showed the money in the cash account on Saturday which has been mentioned before. The new thing is that if I try to transfer this cash into my WellsFargo checking account, it shows the cash available for transfer.
This signature message sponsored by sscritic: Learn to fish.

pshonore
Posts: 5608
Joined: Sun Jun 28, 2009 2:21 pm

Re: Case Study: Broker speed of dividend payments

Post by pshonore » Sun Dec 25, 2016 9:30 am

livesoft wrote:FWIW, a few of the ETFs I hold have payable dates on Tuesday 12/27 and not earlier since Monday is a stock market holiday. Nevertheless, my WellsFargo brokerage already showed the money in the cash account on Saturday which has been mentioned before. The new thing is that if I try to transfer this cash into my WellsFargo checking account, it shows the cash available for transfer.

Same with Fido and VTI which technically pays Tuesday 12/27. Mine shows reinvestment Sat am @ 116.28;

jetstayeat
Posts: 4
Joined: Tue Mar 31, 2015 8:44 pm

Re: Case Study: Broker speed of dividend payments

Post by jetstayeat » Mon Jan 02, 2017 2:04 pm

Here is a Merrill Edge example. I hold a VG fund in a ME rollover IRA. The fund had dividend and cap-gain distributions on 12/28. They were not reinvested or even listed in my ME account until 12/30.

I was surprised by this lag.

livesoft
Posts: 56366
Joined: Thu Mar 01, 2007 8:00 pm

Re: Case Study: Broker speed of dividend payments

Post by livesoft » Mon Jan 02, 2017 2:25 pm

jetstayeat wrote:Here is a Merrill Edge example. I hold a VG fund in a ME rollover IRA. The fund had dividend and cap-gain distributions on 12/28. They were not reinvested or even listed in my ME account until 12/30.

I was surprised by this lag.

But you did the the "reinvest price" as show at Vanguard.com, right? So that means you got the expected "number of shares" from the dollar amount of the distribution just like everybody else for that fund, right?
This signature message sponsored by sscritic: Learn to fish.

User avatar
Lieutenant.Columbo
Posts: 1004
Joined: Sat Sep 05, 2015 9:20 pm
Location: 30th Parallel North

Re: Case Study: Broker speed of dividend payments

Post by Lieutenant.Columbo » Sat Jul 01, 2017 1:57 pm

iShares website says IJS latest Distribution (Dividends?) relevant dates were:
EX: 27-JUN-17
RECORD: 29-JUN-17
PAY: 30-JUN-17

I wanted to point out that my TD Ameritrade account has not posted this latest IJS distributions yet (number of shares hasn't increased [we have it on auto-reinvest] and the transaction history does not show dividends entry for IJS).

Not a big deal anyway, as I assume it'll post sometime next week.
My first instinct was thinking the delay was TDA's (minor) fault but, on second thought, there might be another (iShares?) reason since our three DFA funds' distributions already posted at TDA.
Lt. Columbo: Well, what do you know. Here I am talking with some of the smartest people in the world, and I didn't even notice!

stlutz
Posts: 3961
Joined: Fri Jan 02, 2009 1:08 am

Re: Case Study: Broker speed of dividend payments

Post by stlutz » Sat Jul 01, 2017 3:42 pm

I received my cash dividend on IJS yesterday(6/30) at Fidelity.

livesoft
Posts: 56366
Joined: Thu Mar 01, 2007 8:00 pm

Re: Case Study: Broker speed of dividend payments

Post by livesoft » Sat Jul 01, 2017 5:50 pm

Lieutenant.Columbo wrote:I wanted to point out that my TD Ameritrade account has not posted this latest IJS distributions yet (number of shares hasn't increased [we have it on auto-reinvest] and the transaction history does not show dividends entry for IJS).
Oh, since you have auto-reinvest set, TDAm will not give you the cash on the payable date. They keep the cash and buy you shares on the next market open day (in this case Monday July 3rd) at some point during the day (not necessarily at the open, nor the close) and report that transaction to you at some point before midnight that day. You have no control over whether they give you a good price or not.
This signature message sponsored by sscritic: Learn to fish.

SurferD
Posts: 136
Joined: Sun Mar 22, 2015 12:38 am

Re: Case Study: Broker speed of dividend payments

Post by SurferD » Mon Jul 03, 2017 3:32 am

Interesting thread, thanks for the info. I have a question regarding Interactive Brokers (IB). Does anyone know where you can see when a dividend is paid. It would be great if they actually notified of a dividend payment but they doesn't seem to and as far as I can see going by the cash balances it takes days for a dividend to be paid out after the pay date.

Can anyone advise how to track this better in an IB account?
Thanks
SurferD

*3!4!/5!
Posts: 1256
Joined: Fri Sep 02, 2016 1:47 pm

Re: Case Study: Broker speed of dividend payments

Post by *3!4!/5! » Mon Jul 03, 2017 5:33 am

livesoft wrote:
jetstayeat wrote:Here is a Merrill Edge example. I hold a VG fund in a ME rollover IRA. The fund had dividend and cap-gain distributions on 12/28. They were not reinvested or even listed in my ME account until 12/30.

I was surprised by this lag.
But you did the the "reinvest price" as show at Vanguard.com, right? So that means you got the expected "number of shares" from the dollar amount of the distribution just like everybody else for that fund, right?
My experience with reinvesting dividends in Vanguard funds held at Merrill Edge, is that the amounts are correct (right number of shares at right price) but that it is a couple of days slow in showing up in the account.

User avatar
Lieutenant.Columbo
Posts: 1004
Joined: Sat Sep 05, 2015 9:20 pm
Location: 30th Parallel North

Re: Case Study: Broker speed of dividend payments

Post by Lieutenant.Columbo » Mon Jul 03, 2017 5:47 am

livesoft wrote:
Lieutenant.Columbo wrote:I wanted to point out that my TD Ameritrade account has not posted this latest IJS distributions yet (number of shares hasn't increased [we have it on auto-reinvest] and the transaction history does not show dividends entry for IJS).
Oh, since you have auto-reinvest set, TDAm will not give you the cash on the payable date. They keep the cash and buy you shares on the next market open day (in this case Monday July 3rd) at some point during the day (not necessarily at the open, nor the close) and report that transaction to you at some point before midnight that day. You have no control over whether they give you a good price or not.
livesoft,
Would you say that an investor holding IJS (any ETF?) at TDAm and wanting to reinvest dividends, should reinvest manually (in order to aim for a good price) rather than automatically? thanks
Lt. Columbo: Well, what do you know. Here I am talking with some of the smartest people in the world, and I didn't even notice!

pshonore
Posts: 5608
Joined: Sun Jun 28, 2009 2:21 pm

Re: Case Study: Broker speed of dividend payments

Post by pshonore » Mon Jul 03, 2017 7:24 am

Lieutenant.Columbo wrote:
livesoft wrote:
Lieutenant.Columbo wrote:I wanted to point out that my TD Ameritrade account has not posted this latest IJS distributions yet (number of shares hasn't increased [we have it on auto-reinvest] and the transaction history does not show dividends entry for IJS).
Oh, since you have auto-reinvest set, TDAm will not give you the cash on the payable date. They keep the cash and buy you shares on the next market open day (in this case Monday July 3rd) at some point during the day (not necessarily at the open, nor the close) and report that transaction to you at some point before midnight that day. You have no control over whether they give you a good price or not.
livesoft,
Would you say that an investor holding IJS (any ETF?) at TDAm and wanting to reinvest dividends, should reinvest manually (in order to aim for a good price) rather than automatically? thanks
Not sure about TDA but here's how Fido told me they do it.
Dividend reinvestments are priced at the average price that the security is purchased by Fidelity. This process typically results in a different reinvestment price than the price that the security is currently trading.

Fidelity pre-identifies all customers that will be reinvesting their dividend and goes to the market to purchase shares three days prior to the payable date. We purchase as many shares as possible on a best-efforts basis, determine the average share price, and reallocate these shares proportionately to the customers that are reinvesting their dividend.
This all shows up in accounts on the day the dividend is paid and is usually posted that day although the recent 6/30 payment reinv prices were posted on 7/1. Its possible you'll get a better price doing it yourself but you also can get a worse one, and depending on the ETF and the broker, there may be a commission as well.

livesoft
Posts: 56366
Joined: Thu Mar 01, 2007 8:00 pm

Re: Case Study: Broker speed of dividend payments

Post by livesoft » Mon Jul 03, 2017 9:37 am

Lieutenant.Columbo wrote:Would you say that an investor holding IJS (any ETF?) at TDAm and wanting to reinvest dividends, should reinvest manually (in order to aim for a good price) rather than automatically? thanks
It is a personal thing. I want to take my dividends and invest them, but I don't necessarily want them reinvested back into the same investment that paid the dividends. If I manually invest the money I also have a chance to invest the money a day earlier than TDAmeritrade would do it automatically for me.

I am not sure how you would "aim for a good price" since how would you know ahead of time what a good price is? Contrast that with a broker: They can buy shares of IJS with money and sell them to you for a higher price than they paid for them and pocket the difference. They can do this because they know your dividends are going to be reinvested back into IJS no matter what. Now they are not supposed to take advantage of you, so they do not do anything blatantly obviously suspicious.

Now pshonore writes how Fidelity does it which is more akin to a mutual fund with the shares purchased on the ex-dividend date early. That is, Fidelity fronts the cash by about 3 days in order to give one the same price available on the ex-dividend date. Now if the stock market drops between the ex-dividend date and the payable date, that means you just paid more for your shares. But if the stock market goes up between the ex-dividend date and the payable date, then you got a bargain.

And please do not ever confuse the following terms: ex-dividend date, record date, payable date, reinvest date, declaration date. Sometimes those dates can be the same, but most times they are not. I think that @SurferD may have some dates confused when asking about Interactive Brokers.
This signature message sponsored by sscritic: Learn to fish.

livesoft
Posts: 56366
Joined: Thu Mar 01, 2007 8:00 pm

Re: Case Study: Broker speed of dividend payments

Post by livesoft » Mon Jul 03, 2017 9:47 am

SurferD wrote:It would be great if they actually notified of a dividend payment but they doesn't seem to and as far as I can see going by the cash balances it takes days for a dividend to be paid out after the pay date.

Can anyone advise how to track this better in an IB account?
I don't use IB, but at ALL my other brokers, there is an "Activity" or "Transactions" tab to click on and the date and time of dividend money appearing in the account is shown.

At Fidelity, I just have my dividends automatically sent to my external checking account and I get an e-mail alert when that happens. I do it this way because I don't want my dividends reinvested back into my Fidelity account.

People rave about IB, so I would think that IB has all kinds of alerts that one could set up to get this information sent to one's smart phone because everybody else can do that.
This signature message sponsored by sscritic: Learn to fish.

pshonore
Posts: 5608
Joined: Sun Jun 28, 2009 2:21 pm

Re: Case Study: Broker speed of dividend payments

Post by pshonore » Mon Jul 03, 2017 10:07 am

livesoft wrote:
Lieutenant.Columbo wrote:Would you say that an investor holding IJS (any ETF?) at TDAm and wanting to reinvest dividends, should reinvest manually (in order to aim for a good price) rather than automatically? thanks
It is a personal thing. I want to take my dividends and invest them, but I don't necessarily want them reinvested back into the same investment that paid the dividends. If I manually invest the money I also have a chance to invest the money a day earlier than TDAmeritrade would do it automatically for me.

I am not sure how you would "aim for a good price" since how would you know ahead of time what a good price is? Contrast that with a broker: They can buy shares of IJS with money and sell them to you for a higher price than they paid for them and pocket the difference. They can do this because they know your dividends are going to be reinvested back into IJS no matter what. Now they are not supposed to take advantage of you, so they do not do anything blatantly obviously suspicious.

Now pshonore writes how Fidelity does it which is more akin to a mutual fund with the shares purchased on the ex-dividend date early. That is, Fidelity fronts the cash by about 3 days in order to give one the same price available on the ex-dividend date. Now if the stock market drops between the ex-dividend date and the payable date, that means you just paid more for your shares. But if the stock market goes up between the ex-dividend date and the payable date, then you got a bargain.

And please do not ever confuse the following terms: ex-dividend date, record date, payable date, reinvest date, declaration date. Sometimes those dates can be the same, but most times they are not. I think that @SurferD may have some dates confused when asking about Interactive Brokers.
Fido reinvests three business days before the payment date. In this case (IJS), that coincided with the exdiv date, but that's not usually the case. In fact I think the iShares dividends were announced on the ex-div date which is quite unusual in my experience

SurferD
Posts: 136
Joined: Sun Mar 22, 2015 12:38 am

Re: Case Study: Broker speed of dividend payments

Post by SurferD » Tue Jul 04, 2017 12:08 am

livesoft wrote:
SurferD wrote:It would be great if they actually notified of a dividend payment but they doesn't seem to and as far as I can see going by the cash balances it takes days for a dividend to be paid out after the pay date.

Can anyone advise how to track this better in an IB account?
I don't use IB, but at ALL my other brokers, there is an "Activity" or "Transactions" tab to click on and the date and time of dividend money appearing in the account is shown.

At Fidelity, I just have my dividends automatically sent to my external checking account and I get an e-mail alert when that happens. I do it this way because I don't want my dividends reinvested back into my Fidelity account.

People rave about IB, so I would think that IB has all kinds of alerts that one could set up to get this information sent to one's smart phone because everybody else can do that.
Thanks livesoft, I had a look yesterday and the only way I can see the dividends paid is looking at year to date dividends on the dividends report which also lists dividends awaaiting payment but nothing on dates of payment etc. I actually received a dividend payment (going by the increase in cash balance) yesterday on a pay date from 30th June so it took 3 days to actually arrive in my IB account.

Thanks for the insights, I do believe IB must have some way of notifying as their app is especially useful and user friendly. Ill ask them.
Regards
SurferD

livesoft
Posts: 56366
Joined: Thu Mar 01, 2007 8:00 pm

Re: Case Study: Broker speed of dividend payments

Post by livesoft » Thu Oct 05, 2017 6:49 am

Re: Bond ETF dividends

I noticed a difference between the Payable Dates for the BND and AGG dividends in early October. Both went ex-dividend on October 2. The iShares AGG has October 6th as the Payable Date while the Vanguard BND has October 5th which is one day earlier.

Other Vanguard bond ETFs also have October 5 as their payable date. And other iShares bond ETFs also have October 6 as their payable date.

In the past BND and AGG have had the same ex-dividend and payable dates, so October is a change. This is broker independent since the change is with the ETF sponsor.

While there are little consequences to this for me, it does mean that I get bond ETF dividends on 2 consecutive days each month. Since I usually manually reinvest dividends, I can either make 2 trades on consecutive days or I can wait a day and make a single trade with a larger sum. I can imagine rare situations where getting the dividend a day earlier can be beneficial, so buying BND instead of AGG might be something to consider if the "day earlier" is not a fluke. Both BND and AGG trade commission-free for me.

And if one doesn't want 2 separate days of bond ETF dividends to reinvest, then don't use both iShares and Vanguard bond ETFs in the same account.
This signature message sponsored by sscritic: Learn to fish.

Post Reply