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Learning, Sharing, and Teaching => Investor Alley => Topic started by: dragonwalker on July 18, 2018, 01:44:54 AM

Title: VSTAX and 401K questions about dividends
Post by: dragonwalker 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%
Title: Re: VSTAX and 401K questions about dividends
Post by: mjr 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.
Title: Re: VSTAX and 401K questions about dividends
Post by: Eric 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.
Title: Re: VSTAX and 401K questions about dividends
Post by: Paul der Krake 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.