AboutDr. Joseph de Beauchamp Expertise Over the decades, I have taught the MBA schools in this subject. I have published on over 2000 public companies. I love to help provide information to the individual and company.
Expert: Dr. Joseph de Beauchamp Date: 3/10/2005 Subject: switching around funds in my company plan
Question My company offers several different different funds. Some of the funds pay dividends annually and others quarterly. If I change funds shortly before a known divided payout, would I be entitled to the dividend? Or is there a requirement that a fund has to be held for so many days in order to be eligible for a dividend?
Would this also apply for utility stocks held in my plan?
Answer Usually with mutual funds, they make one payment per year towards the end of the year. Good news is the discount happens if you do not obtain the dividend. If you get the dividend, then the share price will adjust automatically and correct lower for those that did not receive the dividend. Therefore, truly no impact is felt by this method of the dividend.
If you hold through the ex-dividend date, you need to call the fund to find out for sure, then you would receive the cash flow. If not, you would buy at cheaper share price.
Probably so minor a difference that you might spend much more time looking at the equities that they have and their philosophy of investment.
