Good morning everyone…
Can anyone guide…does sbi bank Nifty etf (SETFNIFBK)pay dividend or does its price appreciate with reinvest of dividends as is the case with bankbees?
Or neither of the two?
Someone if have any detail document or weblink kindly share.
Thanks
Thanks…I checked this already…unable to find the dividend part…
Generally, ETFs do not declare dividends. The dividends received by the ETF from the underlying securities are reinvested. By reinvesting the NAV of the ETF will increase.
I am told that paying out dividends by ETF is not an ideal way of managing capital as this will result in retail investors needing to pay tax. Hence most of the ETF do reinvest the dividends received from their underlying stocks. If retail investors need money, she/he can always sell a portion of the units - of course, this will be subject to capital gains if any.
Last year a peculiar incident happened with SBI AMC who declared special dividends to give some cash out to EPFO under the Nifty 50 ETF.
Thanks @neha1101 …
Yes…etfs do reinvest as is the case with bankbees…but unable to find some documentary proof of reinvesting in case of sbi banknifty etf…have any clues??
Thanks yet again
I did a recheck on SBI ETF Nifty Bank - This scheme has been in existence since March 15 and they have not declared any dividends till date. This is from SBI AMC website. When there is no dividends being paid out, the dividends received from the underlying securities will be used to reinvest. I do not think you will get any documentary proof to this extant as it is implied.
In the past I had similar doubts as to how the dividends under the etf was managed, the reply I got from one AMC, is that the dividends so received will first be used to meet the fund expenses and thereafter the rest is immediately reinvested.
Ok…thanks…my only concern is that if I invest in this etf will I be somehow having some benefit of dividends… either payout or reinvest?
Any idea if this etf is considered equivalent to cash or collateral in zerodha pledge?
Thank you so much for your time and effort…
Warm regards
You need not worry about this at all. The AMC either will give out the dividends or reinvest this is for sure. However, people do not prefer dividends as it is subject to tax.
I am sure some other expert will be able to answer your other query regarding cash or collateral…as I have no clue on this aspect.
Thank you so much!!!
@ShubhS9 sir…can you please guide as to this sbi banknifty etf is considered cash equivalent or collateral if pledged?
Thanks in advance…
It’s mentioned in their google sheets. (which they update regularly). It has all the detail.
You can find out the link for the sheets in Zerodha support.
Thank you…thank you…!!!
So nice of you…
Seems like this is for SBI nifty 50 ETF, not for SBI bank nifty ETF.
Ya…u are right brother
No dividends…no returns…nothing???
This ETF is considered as non-cash equivalent. You can check out the complete list of non-cash and cash equivalent securities here.
Ok sir…thank you
As rightly pointed out by many, ETFs generally do not declare dividends. That does not mean no returns. Returns would be in form of price appreciation and capital gains.
