Author Topic: VSTAX and 401K questions about dividends  (Read 773 times)

dragonwalker

  • 5 O'Clock Shadow
  • *
  • Posts: 87
VSTAX and 401K questions about dividends
« on: July 18, 2018, 01:44:54 AM »
I'm just curious I have money in VSTAX which earns a quarterly dividend. I have about as much in my 401K invested in a S&P 500 index, shouldn't that pay a dividend as well? I don't seem to notice any dividend in my 401K holdings. Why is that? The expense ratio of my 401K plan is 0.09%

mjr

  • Bristles
  • ***
  • Posts: 321
  • Age: 53
  • Location: Brisbane, Qld
  • Retired at 52
Re: VSTAX and 401K questions about dividends
« Reply #1 on: July 18, 2018, 02:54:21 AM »
If your fund isn't paying dividends, then they're being reinvested - either because the fund accumulates or because you have (implicitly or explicitly) opted to have them reinvested.

Eric

  • Magnum Stache
  • ******
  • Posts: 4061
  • Location: On my bike
Re: VSTAX and 401K questions about dividends
« Reply #2 on: July 18, 2018, 06:15:39 PM »
I'm just curious I have money in VSTAX which earns a quarterly dividend. I have about as much in my 401K invested in a S&P 500 index, shouldn't that pay a dividend as well? I don't seem to notice any dividend in my 401K holdings. Why is that? The expense ratio of my 401K plan is 0.09%

Your S&P 500 fund most certainly pays a dividend, because it's made up of companies that pay dividends.  As to how or why or when it shows up, you should contact your 401k provider and ask.  They all seem to march to the beat of a different drummer and it's hard for any of us to speculate.

Paul der Krake

  • Magnum Stache
  • ******
  • Posts: 4608
  • Age: 11
  • Location: USA
Re: VSTAX and 401K questions about dividends
« Reply #3 on: July 18, 2018, 06:22:37 PM »
You most likely have a fund that it is technically a trust, and dividends are automatically reinvested, raising the share value instead of distributing cash.

Example:
https://institutional.vanguard.com/VGApp/iip/site/institutional/investments/productoverview?fundId=2040

This technical detail is irrelevant to you as a consumer.