ETF's and Mutual Funds Revisited

[dalekeener]

Most EFT funds pay dividends quarterly or monthly. Most index S&P Index mutual funds or Total Market funds pay annually. Mutual funds are I guess easier to invest a set amount on a regular basis but is there an advantage to the ETF's paying their dividends more frequently and buying the reinvested shares more than once a year or am I just being anal.

Dale

[seattlecyclone]

I don't think there's any advantage to the more-frequent payments. I'm pretty sure a mutual fund will collect the dividends from underlying shares and reinvest them immediately according to the fund's rules. So it's not like the fund is just holding onto cash for you until the end of the year when they pay out the dividends.

[daverobev]

If you're living off the divis then quarterly payments are better; that's what I'm mostly going to be doing.

If you're still in the accumulation phase it makes no difference.

[forummm]

Most EFT funds pay dividends quarterly or monthly. Most index S&P Index mutual funds or Total Market funds pay annually. Mutual funds are I guess easier to invest a set amount on a regular basis but is there an advantage to the ETF's paying their dividends more frequently and buying the reinvested shares more than once a year or am I just being anal.

Dale

I've gotten quarterly dividends from my VFIAX holdings since 2000. Not sure what funds you're talking about. But I don't think it matters at all. Those dividends are invested in the fund until they are paid out, so it really doesn't matter when they pay them to you from a total return standpoint.

[skyrefuge]

Most EFT funds pay dividends quarterly or monthly. Most index S&P Index mutual funds or Total Market funds pay annually.

Citation needed. Vanguard, Fidelity, Blackrock, and Nationwide's S&P mutual funds pay quarterly. Schwab pays yearly. Looks to me like "most" mutual funds pay quarterly.