Important Notice: Our web hosting provider recently started charging us for additional visits, which was unexpected. In response, we're seeking donations. Depending on the situation, we may explore different monetization options for our Community and Expert Contributors. It's crucial to provide more returns for their expertise and offer more Expert Validated Answers or AI Validated Answers. Learn more about our hosting issue here.

Do ETFs always pay out the full dividend of all its constituent stocks?

April 26, 2017constituent dividend ETFs pay stocks

0

Posted

Do ETFs always pay out the full dividend of all its constituent stocks?

1 Answer

0

Posted

Yes, ETFs always collect the full dividend of all constituent stocks and always ‘pay out’ the dividends to the ETF shareholder. This can be a cash distribution or a reinvestment in the ETFs’ underlying index. It comes to the same, because if your ETF reinvests and you need the 2%-3% annual cash stream you can just sell 2%-3% of your annual ETF position to obtain the cash.