Dividend payments after selling funds
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Thread: Dividend payments after selling funds

  1. #1
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    Dividend payments after selling funds

    So for the first time for me, I sold all of my e-series index funds on Dec 13th. On Dec 15th those funds paid out dividends, but I didn't get any.

    I'll call TD later today, but I wanted to get a little info first. What happens to outstanding dividends when you sell everything? Maybe because of the holidays my account hasn't settled yet?



    Thanks


  2. #2
    Senior Member GreatLaker's Avatar
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    You must be a unitholder on the record date or you do not get the distribution. If the record date was Dec 14th and you entered a sale order on the 13th your sale would have closed the 14th, so you did not get the distribution. But it is not really relevant to shareholder return since prices typically drop by the amount of the dividend on the ex-date. Here are a couple of explanations, but note that the settlement period for stocks and ETFs is 3 days, but for mutual funds it is usually one day.

    http://www.investopedia.com/terms/r/recorddate.asp

    http://www.adjustedcostbase.ca/blog/...tlement-dates/
    Invest your time actively and your money passively.

  3. #3
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    I guess you sold before the ex-dividend date. If the payment date was Dec 15 and you haven't gotten anything yet, you're not going to get anything.

    The way it works with stocks & ETF's at least, is that they declare an ex-dividend date, everyone who holds it on that date gets dividends, even if you sell between that date and the payment date. However, if you sell before that date, you don't get any dividends.

    This is not a big deal though, because normally on the day the dividends are paid, the price of the fund drops an equal amount to the dividends that were paid out. So you haven't really lost anything, since the value was higher when you sold than it would have been if you had waited for the dividends. It evens out.

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    Senior Member My Own Advisor's Avatar
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    OK, thank you all for the info, this was pretty knew to me. I buy and sell very seldom, and I was just switching from e-series over to ETFs.

    I don't market time or anything, but from the sounds of it, I don't really need to concern my self with record dates?

    What happens if I were to hold onto a single unit of a fund? Technically I'd still on record for the distribution date, but I guess I'd only receive a payout for that single unit? I guess I was incorrectly thinking that dividends accumulated and was held by the fund until distribution day, but you guys are saying that the dividends were built into the fund price on daily basis?

  7. #6
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    Quote Originally Posted by STech View Post
    but you guys are saying that the dividends were built into the fund price on daily basis?
    It is build into the NAV of the mutual fund.

  8. #7
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    Quote Originally Posted by AltaRed View Post
    It is build into the NAV of the mutual fund.
    Glad to hear. Things are much clearer now. Thank you.


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