. . . you can’t buy a partial share of an ETF, can you?
You can't buy partial shares. Well, at least I can't, at Schwab, anyway. But reinvested dividends result in fractional share deposits all the time, even with ETFs. *
* Some equities don't support automatic reinvesting. I'm not sure what factors affect that, but that's a different question from fractional share deposits.
What is this fractional shares concept???? I know there are fractional units in managed funds, but we don't get fractional shares here.
You dividend reinvestment here is rounded down to the nearest share.... anything leftover is carried forward to the next dividend.
Not entirely sure whether
"here" is Australia or a different brokerage (or both). I'm in the USA, and my broker is Schwab. If I had 100 shares of a $50 stock that pays a 25 cent dividend, the next trading day, after getting paid the dividend, my share balance would be 100.5 shares *; literally, a fraction of a share. No rounding until you get out past 4 digits to the right of the decimal point.**
The next time that stock pays a dividend, that fractional share will also pay a fractional dividend. I presume that fractional dividend will be rounded to the nearest cent, but to be honest, I've never bothered to check.
See:
https://www.investopedia.com/terms/f/fractionalshare.aspThis article says this magic is managed at the brokerage by accumulating fractions of a share across multiple clients so they can be sold as whole shares on the exchange. If you are using a small broker, I would suppose this might not be a service they offer regardless of your broker's country.
* Example assumes a static market price for sake of simplicity.
** It's possible they internally account for share fractions with even greater precision, and only round the figure for display purposes; though I don't know that to be the case. Same could be true, hypothetically speaking, for fractional dividends that result in fractional cents. Just speaking with my old IT propeller beanie cap on. ;) But just because it's possible doesn't mean it's a fact.
Edit to add: I just checked to confirm. I don't have even a single holding that
doesn't have a fractional share component. Even my MM fund has a fractional component.