Vanguard Funds

AnotherJoe

Manesova83 wrote: »

I never said that the past was a stable, predictable place. All I am saying is that there are several seemingly insurmountable problems that will probably come to a head during this century. These are bound to affect future growth and the very financial system itself.

If this doesn't imply that the past was a stable predictable place, what does it mean then?

it's easy to see that the future won't necessarily be a stable, predictable place.

Because if it means, the future is unpredictable, well yeh, its always been so. Including in the past.

Manesova83 wrote: »

But historically, all systems and empires rise and fall, so it is a matter of time until the current order of things collapses and is replaced by something else.

And that was the case at the time of the french revolution, WWI, the russian revolution, WWII, the iron curtain etc. You appear to be thinking that "this time its different" in which case you should perhaps go and live on an island somewhere. Though (probably) apocryphally, in the 1930's there was a guy who saw WWII coming and decided to get the hell out of all that and found a little out of the way place miles from anywhere and any source of conflict. It was called "Iwo Jima"

scoot65

Zero_Sum wrote: »

Anyway sort of back to the start, as someone else who has just started with these a few months back......
...whats the situation with dividends?
If for example I have money in VSL60 & the dividends are reinvested, when they are paid do Ireceive extra stock units or is it just rolled in with the price & it just goes up a bit more? And if the former, when are they paid?

I'm interested in seeing a response to this question too

ColdIron

Zero_Sum wrote: »

Anyway sort of back to the start, as someone else who has just started with these a few months back......
...whats the situation with dividends?
If for example I have money in VSL60 & the dividends are reinvested, when they are paid do Ireceive extra stock units or is it just rolled in with the price & it just goes up a bit more? And if the former, when are they paid?

What class of units do you have? Acc units: the underlying dividends from the companies that make up the fund are retained within the fund and reflected by increased unit price. Inc units: on the ex date the unit price decreases and the dividends are paid to you on the payment date. If you have instructed your platform to automatically reinvest your dividends they will purchase more units for you. VLS dividends are annual. The next ex-date is 4th April 2019 and the payment date is 31st May 2019. If you have Acc units you will see no activity on these dates

scoot65

ColdIron wrote: »

Inc units: on the ex date the unit price decreases and the dividends are paid to you on the payment date. If you have instructed your platform to automatically reinvest your dividends they will purchase more units for you.

With regard to Inc. funds and simplification for declaring tax, would it be simpler to take to dividends as payment or have them reinvested in additional units?

ColdIron

scoot65 wrote: »

With regard to Inc. funds and simplification for declaring tax, would it be simpler to take to dividends as payment or have them reinvested in additional units?

With Inc units you take a cash payment, whether you reinvest them and purchase additional units or not is neither here nor there to the tax man. With Acc units the dividends are retained but the tax treatment is the same as you are the beneficiary in both cases. Within an ISA or SIPP there is no tax. Many people would use Acc for simplicity, some would use Inc and use the payments for rebalancing or payment of fees. Outside of an ISA or SIPP using Inc clearly separates the dividend from capital growth and makes CGT easier to unravel on sale several years and many dividend payments down the road. You will get a tax certificate in either case. Opinion varies, see recent threads

Zero_Sum

ColdIron wrote: »

What class of units do you have? Acc units: the underlying dividends from the companies that make up the fund are retained within the fund and reflected by increased unit price. Inc units: on the ex date the unit price decreases and the dividends are paid to you on the payment date. If you have instructed your platform to automatically reinvest your dividends they will purchase more units for you. VLS dividends are annual. The next ex-date is 4th April 2019 and the payment date is 31st May 2019. If you have Acc units you will see no activity on these dates

In which case are you better off buying units just before the dividend, as you'll get a quick benefit from the bump in price at end of May?

eskbanker

Zero_Sum wrote: »

In which case are you better off buying units just before the dividend, as you'll get a quick benefit from the bump in price at end of May?

What bump in price?

Zero_Sum

eskbanker wrote: »

What bump in price?

The one ColdIron referred to when the dividends are accumulated.

eskbanker

Zero_Sum wrote: »

The one ColdIron referred to when the dividends are accumulated.

Worth re-reading ColdIron's post as you seem to have misunderstood it - it makes it clear that at the end of May dividends are paid from Inc units (which doesn't bump their price), while nothing happens then for Acc units (where the dividends are smoothed across the year).

At the ex date, the price of the Inc units drops by the amount of the dividend so there's no specific benefit in buying just before then as it's a zero sum game.

ColdIron

Zero_Sum wrote: »

In which case are you better off buying units just before the dividend, as you'll get a quick benefit from the bump in price at end of May?

There is no 'bump' as such, certainly not on the payment date. What class of units do you have? If you buy before the ex date you have the right to the dividend but you have also essentially purchased that dividend as it's in the price. If we ignore changes in the unit price due to market movements: Acc: the price won't change on the ex date. Inc: you get the rights to the dividend (that you bought) and the unit price decreases. Your dividend payment will turn up on the payment date. If you bought your Inc units on or after the ex date you buy at a cheaper price but don't have rights to the dividend