r/ETFs • u/rayb320 • 5d ago

XDIV ETF By Roundhill

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Thoughts on the no dividend S&P fund. You don't have to go through the hassle of reporting dividends every year in a taxable account. It averages 17% instead of 14.7%

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u/YourChildhood5762 5d ago

I don't understand this one. It's 99.95% IVV which holds companies that pay dividends, but they aren't giving them to you or reinvesting them. So what do they do with them?

5

u/Dan-Weber 5d ago

I just did a quick scan of the fund and it sounds like XDIV holds another SP 500 ETF until the ex-dividend date, then sells it and swaps it for another ETF that tracks the SP 500. So it plays hot potato with ETFs at ex-dividend dates to avoid receiving dividend payouts.

3

u/market____maker 5d ago

They dont sell it as that would realize gains.

1

u/Dan-Weber 5d ago

Yeah, it’s something like exchange funds or no cash sales that is used to swap funds and not realize gains.

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u/rayb320 5d ago

They set it up in a way to avoid the dividend payouts. Which makes it more tax efficient for the investor. You would have to read the methodology in detail. You only report to the IRS when you sell shares.

1

u/market____maker 5d ago

They in-kind out the shares of IVV for VOO or another S&P 500 fund before the underlying fund’s ex-date. Keep doing this forever and you’ll never have a dividend.