lukestein’s avatarlukestein’s Twitter Archive—№ 3,666

    1. …in reply to @ben_golub
      @ben_golub Most index funds (mutual funds or ETF) track the level of an underlying index, or equivalently the price of a bundle of securities. But as those securities pay dividends, the dividends get passed out to the fund investor who can reinvest them.
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  1. …in reply to @lukestein
    @ben_golub Many would prefer if dividends could “stay in the fund” since cap gains are generally taxed at lower rates than dividends, but (excl. some clever financial engineering) the funds are generally required to pass the dividends out so the investors can pay taxes before reinvesting.
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