Author Topic: Need help understanding how dividends are calculated.  (Read 805 times)

xander

  • 5 O'Clock Shadow
  • *
  • Posts: 24
Need help understanding how dividends are calculated.
« on: September 18, 2017, 12:11:43 PM »
I am a shareholder of VTSAX and I am wondering how the dividends are calculated.

Looking on Vanguard's website on the "Distributions" tab on VTSAX, I see this listed.

    Realized/unrealized gains as of  07/31/2017   
    Realized capital gain/loss                                   $0.08
    Realized capital gain/loss as a % of NAV                   0.13%

    Unrealized appreciation/depreciation                   $20.99
    Unrealized appreciation/depreciation as a % of NAV   34.02%

Since the capital gain/loss is of negative value, that constitutes a loss I assume. So does that mean there are no dividends being paid this quarter due to that Realized capital loss? Or perhaps the appreciation/depreciation is the factor?

Sorry for the trivial questions I am still learning. Thanks!

seattlecyclone

  • Walrus Stache
  • *******
  • Posts: 5400
  • Age: 35
  • Location: Seattle, WA
    • My blog
Re: Need help understanding how dividends are calculated.
« Reply #1 on: September 18, 2017, 12:31:49 PM »
Dividends and capital gains are separate.

If the fund sells stock for more than they paid, that's a capital gain, and they generally are required to distribute that amount to shareholders.

Separately from this, stock owned by the fund will pay dividends from time to time, and the fund must in turn distribute this money to shareholders.

VTSAX pays about 2% in dividends each year. The exact amount depends on the dividends paid by the companies whose stock is owned by the fund.