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FIRST TIME INVESTOR

ETF returns

I’m a beginner. I have been on here for about 2 months and started with micro-EFT. I feel comfortable with this choice and frequency of investment and can see growth already. My questions are do all ETF’s pay dividends? How frequently? Or do only some pay dividends and the rest you need to sell? How do you know which ones will pay dividends when it is a whole portfolio of EFT?

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Dave Gow - Strong Money Australia

INVESTOR

5 months ago

Hi Ashley and welcome :)

Nice job getting started, and good questions.

Not all ETFs pay dividends, but almost all of them. It’s based on which stocks are held inside the ETF. Given most companies pay dividends, there’s almost always a bunch of companies inside an ETF which pay dividends that the ETF passes onto the shareholder.

If a shareholder wants more income than the ETF pays in dividends, they can sell some shares to create extra cash.

As for knowing which ETFs will pay dividends, it’s just a matter of looking at each one individually on the fund’s website. You can find the fund page simply by googling the ETF name. There will be plenty of information on the fund page which will show the current distribution (dividend) yield, history of past distributions, etc. So from there it’s very easy to figure out whether it pays dividends or not.

Hope that helps.

Dave

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5 months ago

Hi Ashley! Great question, we’ve had a few people ask this one so a little while ago we wrote a blog on the topic. Hopefully this helps 😊

Take a look at this blog article on Pearler. https://pearler.com/explore/learn/blog/do-etf...

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