Ex-Dividend Date

nxdmsandkaskdjaqd

I was expecting an income payment for a fund that I purchased, but it didn't arrive.  I have contacted the provider, and await a reply.  In the mean time, could I understand more about Ex-dividend payments and dates.

I have a contract notice that states the purchase of the fund on the 1st July and a settlement date of the 6th July.  The Ex-dividend date for the fund was the 1st of July.  Should I have received the income based on the dates provided?

MaxiRobriguez

The ex-dividend and payment date are different dates.

You need to hold shares on the ex-dividend date (ie, not bought on that day but going into it) to receive a payment. 

Payment date lagtime can be anywhere from a couple of days to a couple of months depending on the company.

Edit: There's no benefit of trying to time purchases around ex-div dates. The price will usually drop on the day of ex-div in line with the div yield of that payment. If anything it's better to buy after an ex-div as if you're reinvesting that div you'll pay two lots of trading fees if you pay those.

ColdIron

If you purchased the shares/units before the ex date you have the right to the dividend but it will not be paid until the payment date which could be a month or so later. As you did not own the shares at open of business on the ex date I don't believe you have the right to the dividend and will still need to hold them on the next ex date

nxdmsandkaskdjaqd

ColdIron said:

If you purchased the shares/units before the ex date you have the right to the dividend but it will not be paid until the payment date which could be a month or so later. As you did not own the shares at open of business on the ex date I don't believe you have the right to the dividend and will still need to hold them on the next ex date

The fund was purchased prior to the ex-dividend date.

I note your comment "As you did not own the shares at open of business on the ex date I don't believe you have the right to the dividend "  The website states "the date an investor must hold the fund to qualify for the next income payment".  Does that change your thoughts?

ColdIron

nxdmsandkaskdjaqd said:

ColdIron said:

If you purchased the shares/units before the ex date you have the right to the dividend but it will not be paid until the payment date which could be a month or so later. As you did not own the shares at open of business on the ex date I don't believe you have the right to the dividend and will still need to hold them on the next ex date

The fund was purchased prior to the ex-dividend date.

In your OP you say you made your purchase on the ex date not before

I have a contract notice that states the purchase of the fund on the 1st July and a settlement date of the 6th July.  The Ex-dividend date for the fund was the 1st of July.

It's a critical difference

I note your comment "As you did not own the shares at open of business on the ex date I don't believe you have the right to the dividend "  The website states "the date an investor must hold the fund to qualify for the next income payment".  Does that change your thoughts?

That depends upon which of your 2 statements is true. What is the fund?

Perhaps have a read of this link

• Typically, the ex-dividend date for a stock is one business day before the record date, meaning that an investor who buys the stock on its ex-dividend date or later will not be eligible to receive the declared dividend. Rather, the dividend payment is made to whoever owned the stock the day before the ex-dividend date

https://www.investopedia.com/terms/e/ex-dividend.asp

MaxiRobriguez

nxdmsandkaskdjaqd said:

ColdIron said:

If you purchased the shares/units before the ex date you have the right to the dividend but it will not be paid until the payment date which could be a month or so later. As you did not own the shares at open of business on the ex date I don't believe you have the right to the dividend and will still need to hold them on the next ex date

The fund was purchased prior to the ex-dividend date.

Then you will receive a payment on the payment date, whatever that is. It should be stated by the fund somewhere.

nxdmsandkaskdjaqd

ColdIron said:

nxdmsandkaskdjaqd said:

ColdIron said:

If you purchased the shares/units before the ex date you have the right to the dividend but it will not be paid until the payment date which could be a month or so later. As you did not own the shares at open of business on the ex date I don't believe you have the right to the dividend and will still need to hold them on the next ex date

The fund was purchased prior to the ex-dividend date.

In your OP you say you made your purchase on the ex date not before

I have a contract notice that states the purchase of the fund on the 1st July and a settlement date of the 6th July.  The Ex-dividend date for the fund was the 1st of July.

It's a critical difference

I note your comment "As you did not own the shares at open of business on the ex date I don't believe you have the right to the dividend "  The website states "the date an investor must hold the fund to qualify for the next income payment".  Does that change your thoughts?

That depends upon which of your 2 statements is true. What is the fund?

Perhaps have a read of this link

• Typically, the ex-dividend date for a stock is one business day before the record date, meaning that an investor who buys the stock on its ex-dividend date or later will not be eligible to receive the declared dividend. Rather, the dividend payment is made to whoever owned the stock the day before the ex-dividend date

https://www.investopedia.com/terms/e/ex-dividend.asp

I did make the purchase (made a payment to the provider) prior to the ex-dividend date.  The contact note from the provider states that I purchased the fund on the ex-dividend date. 

The fund is: ROYAL LONDON STERLING EXTRA YIELD BOND

[Deleted User]

nxdmsandkaskdjaqd said:

I was expecting an income payment for a fund that I purchased, but it didn't arrive.  I have contacted the provider, and await a reply.  In the mean time, could I understand more about Ex-dividend payments and dates.

I have a contract notice that states the purchase of the fund on the 1st July and a settlement date of the 6th July.  The Ex-dividend date for the fund was the 1st of July.  Should I have received the income based on the dates provided?

Hi,

no.

I think you are getting mixed up with purchase/trade date and settlement date:

When purchasing shares of a security, there are two key dates involved in the transaction. The first is the trade date, which marks the day an investor places the buy order in the market or on an exchange. The second is the settlement date, which marks the date and time the legal transfer of shares is actually executed between the buyer and seller. The time frame between the trade date and settlement date differs from one security to another, due to varying settlement rules attached to different types of investments. 

Also dividend payment date could be weeks after ex div date, example BEMO:

Dividend Type	Dividend Amount	Ex Dividend Date	Payment Date
Interim	15	27/05/2021	28/06/2021
Final	10	17/12/2020	05/02/2021
Interim	15	04/06/2020	26/06/2020
Final	20	09/01/2020	14/02/2020

Prism

It doesn't make any difference to the overall outcome if you receive the dividend or not - you still get the same total return. It looks like you bought the fund on Ex-dividend date which means you don't get the dividend this time but you did buy the fund cheaper than it was the day before.

ColdIron

nxdmsandkaskdjaqd said:

ColdIron said:

nxdmsandkaskdjaqd said:

ColdIron said:

If you purchased the shares/units before the ex date you have the right to the dividend but it will not be paid until the payment date which could be a month or so later. As you did not own the shares at open of business on the ex date I don't believe you have the right to the dividend and will still need to hold them on the next ex date

The fund was purchased prior to the ex-dividend date.

In your OP you say you made your purchase on the ex date not before

I have a contract notice that states the purchase of the fund on the 1st July and a settlement date of the 6th July.  The Ex-dividend date for the fund was the 1st of July.

It's a critical difference

I note your comment "As you did not own the shares at open of business on the ex date I don't believe you have the right to the dividend "  The website states "the date an investor must hold the fund to qualify for the next income payment".  Does that change your thoughts?

That depends upon which of your 2 statements is true. What is the fund?

Perhaps have a read of this link

• Typically, the ex-dividend date for a stock is one business day before the record date, meaning that an investor who buys the stock on its ex-dividend date or later will not be eligible to receive the declared dividend. Rather, the dividend payment is made to whoever owned the stock the day before the ex-dividend date

https://www.investopedia.com/terms/e/ex-dividend.asp

I did make the purchase (made a payment to the provider) prior to the ex-dividend date.  The contact note from the provider states that I purchased the fund on the ex-dividend date. 

The fund is: ROYAL LONDON STERLING EXTRA YIELD BOND

You gave your instruction to your platform before the 1st but funds are not traded on an exchange like shares. I.e. it is not bought immediately at the current valuation. Funds are forward priced so you don't know what the price is when you give your instruction, you will get the price quoted at the next valuation point. This is typically midday for many UK funds but a quick glance shows that the valuation point for RL Sterling Extra Yield is 17:00

There are also other cut off points that can delay things, your platform may only forward those instructions received before, say, 8:00 or 11:00 to the fund manager. The fund manager may have their own cut off points

To have the right to the dividend you must purchase the units c.u.m (with) dividend. On the ex (without) dividend date they start trading (at open of business) without the right to the dividend

The contract note is the authoritative document in these things so as the trade was made on the ex date, without the right to the dividend, you won't get it

It doesn't make much difference though, if you bought the Income class of units then the unit price will fall on the ex date (to reflect the value of the money leaving the fund) so you get them cheaper. If they had been traded the day before you would have paid a higher unit price and then seen it decrease but have a lump of cash in your account to make up for it

If you actually purchased the Accumulation class it make no difference as the dividend is not paid out but simply retained in the fund

Edit Blimey, the parser doesn't like c.u.m

MaxiRobriguez

nxdmsandkaskdjaqd said:

ColdIron said:

nxdmsandkaskdjaqd said:

ColdIron said:

If you purchased the shares/units before the ex date you have the right to the dividend but it will not be paid until the payment date which could be a month or so later. As you did not own the shares at open of business on the ex date I don't believe you have the right to the dividend and will still need to hold them on the next ex date

The fund was purchased prior to the ex-dividend date.

In your OP you say you made your purchase on the ex date not before

I have a contract notice that states the purchase of the fund on the 1st July and a settlement date of the 6th July.  The Ex-dividend date for the fund was the 1st of July.

It's a critical difference

I note your comment "As you did not own the shares at open of business on the ex date I don't believe you have the right to the dividend "  The website states "the date an investor must hold the fund to qualify for the next income payment".  Does that change your thoughts?

That depends upon which of your 2 statements is true. What is the fund?

Perhaps have a read of this link

• Typically, the ex-dividend date for a stock is one business day before the record date, meaning that an investor who buys the stock on its ex-dividend date or later will not be eligible to receive the declared dividend. Rather, the dividend payment is made to whoever owned the stock the day before the ex-dividend date

https://www.investopedia.com/terms/e/ex-dividend.asp

I did make the purchase (made a payment to the provider) prior to the ex-dividend date.  The contact note from the provider states that I purchased the fund on the ex-dividend date. 

The fund is: ROYAL LONDON STERLING EXTRA YIELD BOND

Then you purchased the fund on the ex-dividend date and therefore will not receive the dividend this time round. Your purchase date is not when you pressed the button but when the purchase was settled.

As previously stated, there is no benefit to trading around ex-dividend dates, so you are not out of pocket.