Author Topic: Vanguard ETF dividend so small?  (Read 3228 times)

astvilla

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Vanguard ETF dividend so small?
« on: April 01, 2015, 10:30:45 AM »
Checked dividend returns for my VTI and VXUS and it was a lot smaller than I imagined.

I had 50 shares of VTI and got $25.4 back, doing the math it came out right. But same fund but Fidelity's total stock market, I got $135 out of $10000 invested though that was December. The VTI dividend also came out to cash instead of reinvesting, is that because you can't buy whole shares of ETFs?

Other questions include....

Are dividend payouts better with VTSAX than VTI because of number of shares? since that's how it seems to be calculated?

Why do VTI and VTSAX have different dividend/share and why different numbers if they are the same fund? There's some dividend % that comes up on google for VTI or VXUS like 1.7% and 3.43% (lowered to 2.8% for VXUS?!) what does that % represent? Each quarter or whole year? Maybe fidelity's did better because it's biennial whereas Vanguard is quarterly? And why are end of the year dividends usually more or the schedules different?

My index investing strategy doesn't seem to yield as great returns as individual stock picking it's kinda discouraging thinking about the individual stocks I thought buying doing so well but I stuck with index investing. I know I know long-term and it's only been what 6-7 months and I'm overall flat. I had some returns because I sorta timed the market on the down and buy ETFs at those moments but haven't sold anything, figured I could save a little $$ when the market just dips a bit but not like 10-30% correction. Just wondering how long is "long-term?" 5 year? 10 year? 30 year?

Unrelated but I have Fidelity and Vanguard index funds/etfs. Personally I want to consolidate all into Vanguard for simplicity reason but Fidelity's website is so much better and easy to see everything. I'm also worried about cyberattacks, sudden electronic shut downs and losing all records. How secure is the data and would total shut down mean I lose all my assets? Should I print out statements and reports to have a hard copy in case they need it? My institution recently got attacked from Chinese and Eastern European servers so I'm worried about Vanguard and Fidelity's. Would having separate brokerages help reduce that risk? What is the advantage/disadvantage of having one or both brokerages?

Sorry for the rambling and thank you for your advice.
« Last Edit: April 01, 2015, 10:34:02 AM by fewaopi »

forummm

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Re: Vanguard ETF dividend so small?
« Reply #1 on: April 01, 2015, 11:20:27 AM »
The annual % yield on VTI and VTSAX should be about the same. It could be off by a little if VTI is trading for something a bit different than its underlying value. But if you have $10k of VTI and $10k of VTSAX, the total dollar amount of dividend received for each should be about the same.

You can setup your account to have VTI automatically be reinvested for you. It will buy fractional shares for you as well.

The price of one share of VTI and one share of VTSAX are not important. The total dollar amount you have is what matters. One just owns slightly smaller amounts of each company's stocks than the other.

Fidelity's dividend isn't "better", it's just that the dividends are released 2x per year instead of 4x (if what you say is correct). So for $10k invested in each, the total dividend yield for the year should be similar for both (with differences for expense ratio, tracking error, underlying benchmark differences if any, etc)

skyrefuge

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Re: Vanguard ETF dividend so small?
« Reply #2 on: April 01, 2015, 04:37:33 PM »
My index investing strategy doesn't seem to yield as great returns as individual stock picking it's kinda discouraging thinking about the individual stocks I thought buying doing so well but I stuck with index investing. I know I know long-term and it's only been what 6-7 months and I'm overall flat. I had some returns because I sorta timed the market on the down and buy ETFs at those moments but haven't sold anything, figured I could save a little $$ when the market just dips a bit but not like 10-30% correction. Just wondering how long is "long-term?" 5 year? 10 year? 30 year?

Sure, 30 years sounds good for "long-term". It sure as hell isn't 6-7 months. Also, since you're a human being, you're almost certainly using selective memory. You're probably remembering the stocks that you thought of buying which are doing well much more than you're remembering the stocks that you thought of buying which are doing less-well. Until you actually put $X into stock Y on date Z (or explicitly write down that you would have made that transaction), your comparison is going to be biased.

I'm not sure why different funds have different dividend schedules. Maybe Fidelity's distributions are less-frequent than Vanguard's so that they can make money off your dividends for longer before paying them out? (though I think that would hurt their tracking). I also don't really know why year-end dividend payouts seem to be greater. In Fidelity's case, there is such a huge difference between the two payments that their goal may be to simply pay all dividends at the end of the year, and the payment in April is some sort of "supplemental" payment carried over from the previous year? I know Vanguard funds sometimes have such supplemental payments in the spring. For Vanguard's quarterly payouts, the Q4 payment also seems to be somewhat larger in general. I've always assumed this is just due to the underlying companies having higher payouts in Q4 for some reason, or companies who only do annual or semi-annual payments tend to do them in the Q4? How's that for an answer full of questions?

forummm

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Re: Vanguard ETF dividend so small?
« Reply #3 on: April 01, 2015, 06:23:24 PM »
How's that for an answer full of questions?

Was it full of questions? Are you sure? Do you think answers shouldn't have so many questions in them? What gave you that opinion?