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How does it work in the US with index funds? If the index fund contains stocks with dividends, do you get some of that money? Where I live I haven’t seen any br
by blowfish721 6y ago
How does it work in the US with index funds? If the index fund contains stocks with dividends, do you get some of that money?
Where I live I haven’t seen any broker that doesn’t keep these for themselves which is kind of a bummer to be honest.
- LatteLazy 6y agoFor the US I'm not sure I'm afraid. Here in the UK, we get the money if we want it. You can select either to have the dividend re-invested (called growth or accumulating) or to receive it normally quarterly (called distributing)... I'm surprised you can't get a re-investing one.
- pedrosorio 6y agoCan you give an example of a broker that keeps the dividends for themselves? I know outside of the US there is a concept of distributing vs accumulating funds (and in both cases you get the dividends, just in a different form): https://www.bogleheads.org/wiki/Comparison_of_accumulating_ETFs_and_distributing_ETFs https://www.bogleheads.org/wiki/Comparison_of_accumulating_E...
- blowfish721 6y agoYou probably right, I could have been so hung up on cash payouts that I missed that. As for example I haven’t seen any broker in Sweden that does cash payouts but like you said the money is probably going back to the investors just not as cash.
- rebuilder 6y agoFor tax reasons, reinvesting the dividends is preferable as (here at least) that doesn't trigger a tax event like a dividend paid outside the fund would.
- deanmoriarty 6y agoI wish that was the case in the US!
- Cerium 6y agoIn the US the dividends are paid out usually with an option to reinvest them into your ownership of the fund.
- kube-system 6y agoIndex funds in the US pass through dividend earnings to their investors, either in the form of cash or in additional shares of the security.