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Top 10 questions about dividends

Tuesday, December 6th, 2011

Based on searches that lead people to Six Figure Investing, these are the top 10 questions people ask about dividends:

  1. When is XYZ’s ex-dividend date? This information can be hard  to find.  Some companies provide the entire year’s dates on their webside (e.g., iShares),  others like Vanguard only reveal the information a few days before the ex-dividend occurs.  I have summarized / estimated ex-dividend dates for many of the popular ETFs here.
  2. When is XYZ’s distribution or pay date? Same as question #1, this information can be hard to find.  I summarize pay dates along with ex-dividend dates for many ETFs here.
  3. When do I have to buy a security in order to receive the dividend? The day before it goes ex-dividend or earlier.
  4. When can I sell a security and still receive the dividend? On the ex-dividend date or later.  You can safely ignore the record date.  See here for a detailed explanation of how this works.
  5. What happens to a security’s price when it goes ex-dividend? It will typically drop by the amount of the dividend—assuming the market is opening flat.   If the market is strongly up or down at opening the price will be influenced by this.
  6. What if I’m short the security when it goes ex-dividend? You owe the dividend.  It will be subtracted from your brokerage account on the distribution date.  You borrowed the stock, you are responsible for paying the owner of the security the dividend.
  7. Do I get a dividend if I own a call or put option on the security? No, with an option you don’t actually own the security, you only have the right to buy or sell it, so you don’t get a dividend.  However, the prices of options are influenced by dividends, for example the bid price on deep in the money calls will decrease to compensate for an upcoming dividend.
  8. What happens if I’m short put or call options on a security when it goes ex-dividend? If you don’t own any of the underlying security, then nothing direct happens.  Again the option prices are influenced by the security’s dividend, but there is no direct dividend received, or owed.
  9. What if I have a covered call position with a security when it goes ex-dividend?It depends on how much premium is present on the option price when the security goes ex-dividend.
    • If your calls are deep in the money, with premiums significantly less than the dividend amount, then your options will probably be assigned—and you will wake up on ex-dividend day with your position converted to cash—minus your security and your short options.  No dividend for you.
    • If your options are out of the money by more than the dividend amount nothing will happen to your calls and you will collect the dividend.
    • If your calls are between these two limits then it depends on the prices at the end of the day before the ex-dividend date.  My experience is that if the premium of your calls is 50% or less than the dividend amount, your calls will probably will assigned.
  10. Are there any dividend capture schemes that  isolate you from market risk? The short answer for retail customers is no.  Wall Street excels at  preventing anyone from getting a free lunch.   You can use a covered call position to move away from the zero-sum situation on ex-dividend day of having a dividend, plus a security that has just dropped by the value of the dividend, but you are still exposed to significant market risk.  See this post for more on dividend capture schemes.

Dividends from IVV and VOO

Friday, June 24th, 2011

See this post for updated dividend information for IVV and VOO.

Sailing through the IEF ex-dividend

Saturday, April 2nd, 2011

IEF, Barclays 7-10 year Treasury note ETF, went ex-dividend April 1st with a declared dividend of $0.248 per share.  Somewhat surprisingly my IEF + DTYS hedge didn’t dip at all, closing at 146.11, the same close as the 31st.  I don’t see any reason why DTYS should go up on IEF’s ex-dividend date—and it is probably just a random thing. I’m not complaining.  During the day the hedge went as high as 146.24.    The average price of the IEF+DTYS hedge since DTYS started trading in August 2010 is 146.17.

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IEF + DTYS: A low risk hedge with dividends?

Wednesday, March 30th, 2011

I continue to evaluate (and invest in) a hedge position created by going long both IEF, Barclays 7  to 10 year treasury ETF and DTYS, Barclays’ iPath® US Treasury 10-year Bear ETN. The net position, holding equal shares of both securities should yield around 1.7% annually, and since I’m willing to bet that interest rates won’t be going down anytime soon I’m boosting the overall yield by about another 3% by writing calls on my IEF position. For more information on this hedge see this post. This hedge seemed to perform well during the recent correction. When IEF climbs quickly DTYS lagged, but it eventually caught up.

IEF is going ex-dividend this Friday, 1-April, so I thought I would take another look at the historical data to see if there was anything noticeable related to the IEF ex-dividend date.

IEF + DTYS hedge, click to enlarge

The yellow triangles mark IEF’s ex-dividend dates. Visually there doesn’t seem to be any significant impact on the hedge.

You might wonder if the IEF + DTYS combination is all that great a hedge reviewing this first chart. The next chart provides a better perspective by showing the normalized individual performance of IEF and DTYS. The standard deviation on IEF and and DTYS is about 3% and 6.5% of their average values respectively (coefficient of variance). The equivalent number for the IEF + DTYS hedge is 0.5%.  The second graph provides a visual representation.

IEF + DTYS with normalized IEF and DTYS, click to enlarge

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IWM and other quarterly iShare Russell ETFs go ex-dividend

Thursday, March 24th, 2011

iShares’ Russell 2000 Value Index Fund, IWM went ex-dividend Friday, September 23rd with a payout of $0.2498 per share. The distribution date is September 29th. See this post for IWM’s dividend history over the last five years. For the remaining ex-dividend and distribution dates for 2011 see this post.

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Dividend history for IWM

Tuesday, March 15th, 2011

For ex-dividend and pay dates for IWM see this post.

If you would like the dividend history for another security, see this post.

 

SPY and other SPDR ETFs ex-dividend

Sunday, March 13th, 2011

For updated information about SPY, IVV, and VOO’s dividend see this post.

See here for my list / dates for iShare S&P related funds and here for the Russell related funds.

Vanguard treats their ex-dividend dates like state secrets.   See here for my estimates on Vanguard ETF ex-dividend and pay dates.

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Vanguard ETF ex-dividend and distribution dates

Friday, February 11th, 2011

Apparently Vanguard likes to keep their ETF ex-dividend and distribution dates a secret until just a couple days before the event.  It has that old mutual fund feel to it—”we’ll give you a quote after-market and allow you to buy or sell our stuff at the end of the day, otherwise go away…”

As a result, the dates below are just guesses, based on previous year’s ex-dividend and distribution dates.   For ex-dividend and pay dates see this  Vanguard link for getting the confirmed dates.

Selected Vanguard ETF 2011 Monthly Ex-dividend & Distributions Dates:  BND, BSV, VGLT, BIV, VCSH

Ex-dividend Date 1-Feb 1-Mar 2-Apr 1-May 1-Jun 2-Jul
1-Aug 4-Sep 1-Oct 1-Nov 3-Dec 24-Dec
Distribution Date 7-Feb 7-Mar 9-Apr 7-May 7-Jun 9-Jul
5-Aug 7-Sep 7-Oct 7-Nov 10-Dec 31-Dec

BND Vanguard Total Bond Market ETF
BSV Vanguard Short-Term Bond ETF
VGLT Vanguard Long-Term Govt Bd Idx ETF
BIV Vanguard Intermediate-Term Bond ETF
VCSH Vanguard Short-Term Corp Bd Idx ETF

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Selected Vanguard ETF Quarterly Ex-dividend & Distributions Dates—Group A:  VFH, VNQ, VUG, VOO

Ex-dividend Date 23-Mar-2012 22-Jun-2012 21-Sep-2012 24-Dec-2012
Distribution Date 30-Mar-2012 29-Jun-2012 28-Sep-2012 31-Dec-2012

VFH Vanguard Financials ETF
VNQ Vanguard REIT Index ETF
VUG Vanguard Growth ETF
VOO Vanguard S&P 500 ETF

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Selected Vanguard ETF Quarterly Ex-dividend & Distribution Dates—Group B: VIG, VTI, VTV, VV, VYM

Ex-dividend Date 23-Mar-2012 22-Jun-2012 21-Sep-2012 19-Dec-2012
Distribution Date 30-Mar-2012 29-Jun-2012 28-Sep-2012 26-Dec-2012

VIG Vanguard Dividend Appreciation ETF
VTI Vanguard Total Stock Market ETF
VTV Vanguard Value ETF
VV Vanguard Large Cap ETF
VYM Vanguard High Dividend Yield Indx ETF

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Selected Vanguard ETF Semi Annual Ex-dividend & Distributions Dates: VEA, VB, VGK, VO, VBR

Ex-dividend Date ??? 26-Dec-2011
Distribution Date ??? 30-Dec-2011

VEA Vanguard Europe Pacific ETF
VB Vanguard Small Cap ETF
VGK Vanguard European ETF
VO Vanguard Mid-Cap ETF
VBR Vanguard Small Cap Value ETF

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Selected Vanguard ETF Annual Ex-dividend & Distributions Dates: VWO, VEU, VAW, VDE, VOT, VBK, VGT

Ex-dividend Date 22-Dec-2011
Distribution Date 29-Dec-2011

VWO Vanguard Emerging Markets Stock ETF
VEU Vanguard FTSE All-World ex-US ETF
VAW Vanguard Materials ETF
VDE Vanguard Energy ETF
VOT Vanguard Mid-Cap Growth ETF
VBK Vanguard Small Cap Growth ETF
VGT Vanguard Information Technology ETF

Volatility and Bond moves

Friday, January 28th, 2011

VIX was touching / very close to the lower 2 sigma Bollinger band this morning, so I sold my  XIV position at 150.13.  Bought some IEF (Barclays 7-10  Treasuries) at 93.80  because it was near the low end of its current trading range, will go ex-dividend next week (1-Feb) with a dividend of around $0.24/share, and tends to go up if equities go down.

Later in the day,  with IEF up at 94.18  I put a 0.1 point  trailing stop on the position, because I had gotten more than my target profit on the position, but wanted to leave some room for an additional move up.  The position sold out at 94.20.

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JNK dividend history and ex-dividend / pay dates

Thursday, December 16th, 2010

Ex-Dividend and Pay Date information from SPDR

Ex-dividend  1-Feb-11   1-Mar-11  1-Apr-11  2-May-11   01-Jun-11   1-Jul-11   1-Aug-11   1-Sep-11   3-Oct-11   1-Nov-11   1-Dec-11   28-Dec-11

Pay Date   9-Feb-11   9-Mar-11   11-Apr-11   10-May-11   09-Jun-11   12-Jul-11   9-Aug-11   12-Sep-11   11-Oct-11   9-Nov-11   9-Dec-11  6-Jan-12

For ex-dividend information about other ETFs see ETF dividend information, including ex-div and pay dates.

For dividend history on other ETFs see Dividend history.