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A Fin24 user wants to know how dividends are paid on Satrix 40 shares. He writes:
I just bought 50 000 Satrix 40 shares.
How are dividends paid? Are they paid on 50 000 shares, or are 10 Satrix 40 shares equivalent to 1 ordinary share, meaning 50 000 shares are equivalent to 5 000 shares?
And what about other Satrix products?
Brett Landman, CEO of Satrix Managers, responds:
The Satrix 40 exchange-traded fund makes quarterly distributions to investors. As the companies comprising the index (and accordingly held by the Satrix 40 portfolio) declare dividends, such dividends will accrue to the Satrix 40 portfolio.
In addition, scrip lending revenue (if any) generated by the Satrix 40 portfolio, interest on any cash held and any other income earned will be added to the gross income pool held by the portfolio.
All costs and expenses incurred by the portfolio (including the management fee charged by Satrix Managers) will be deducted from the aforesaid gross income figure, and the net income will be distributed to Satrix 40 security holders.
At the end of every distribution period, the Satrix 40 portfolio will distribute all of its net income to investors in proportion to the number of Satrix 40 participatory interests (or Satrix 40 securities or shares as they are also called) held by them.
So if for example the quarterly distribution payable is R0.50 per Satrix 40 security, the user will receive a total gross distribution of R25 000 (50 000 Satrix 40 shares multiplied by R0.50).
Dividends withholding tax is however applicable, and therefore the net distribution received will be net of the dividends withholding tax amount deducted from the gross distribution amount.
As a listed security, the Satrix distribution announcements (disclosing details of the distributions payable) are published through the JSE News Service (SENS) as well as on the Satrix website.
All the current Satrix ETFs make distributions on a quarterly basis, with the exception of the Satrix Rafi ETF, which is a total return ETF (distributions are reinvested).
In the case of the Satrix Rafi, ETF distributions (if any) are made by the portfolio on a monthly basis to Satrix Rafi security holders but immediately returned and reinvested into the Satrix Rafi portfolio (this reinvestment will reflect as an increase in the base cost of the investor's existing Satrix Rafi securities).
Satrix Rafi security holders accordingly do not retain the distributions in cash, but receive the benefit of the reinvestment of the distribution.
- Fin24
Do you have a pressing financial question? Post it on our Money Clinic section and we will get an expert to answer your query.
Disclaimer: Fin24 cannot be held liable for any investment decisions made based on the advice given by independent financial service providers.
Under the ECT Act and to the fullest extent possible under the applicable law, Fin24 disclaims all responsibility or liability for any damages whatsoever resulting from the use of this site in any manner.
I just bought 50 000 Satrix 40 shares.
How are dividends paid? Are they paid on 50 000 shares, or are 10 Satrix 40 shares equivalent to 1 ordinary share, meaning 50 000 shares are equivalent to 5 000 shares?
And what about other Satrix products?
Brett Landman, CEO of Satrix Managers, responds:
The Satrix 40 exchange-traded fund makes quarterly distributions to investors. As the companies comprising the index (and accordingly held by the Satrix 40 portfolio) declare dividends, such dividends will accrue to the Satrix 40 portfolio.
In addition, scrip lending revenue (if any) generated by the Satrix 40 portfolio, interest on any cash held and any other income earned will be added to the gross income pool held by the portfolio.
All costs and expenses incurred by the portfolio (including the management fee charged by Satrix Managers) will be deducted from the aforesaid gross income figure, and the net income will be distributed to Satrix 40 security holders.
At the end of every distribution period, the Satrix 40 portfolio will distribute all of its net income to investors in proportion to the number of Satrix 40 participatory interests (or Satrix 40 securities or shares as they are also called) held by them.
So if for example the quarterly distribution payable is R0.50 per Satrix 40 security, the user will receive a total gross distribution of R25 000 (50 000 Satrix 40 shares multiplied by R0.50).
Dividends withholding tax is however applicable, and therefore the net distribution received will be net of the dividends withholding tax amount deducted from the gross distribution amount.
As a listed security, the Satrix distribution announcements (disclosing details of the distributions payable) are published through the JSE News Service (SENS) as well as on the Satrix website.
All the current Satrix ETFs make distributions on a quarterly basis, with the exception of the Satrix Rafi ETF, which is a total return ETF (distributions are reinvested).
In the case of the Satrix Rafi, ETF distributions (if any) are made by the portfolio on a monthly basis to Satrix Rafi security holders but immediately returned and reinvested into the Satrix Rafi portfolio (this reinvestment will reflect as an increase in the base cost of the investor's existing Satrix Rafi securities).
Satrix Rafi security holders accordingly do not retain the distributions in cash, but receive the benefit of the reinvestment of the distribution.
- Fin24
Do you have a pressing financial question? Post it on our Money Clinic section and we will get an expert to answer your query.
Disclaimer: Fin24 cannot be held liable for any investment decisions made based on the advice given by independent financial service providers.
Under the ECT Act and to the fullest extent possible under the applicable law, Fin24 disclaims all responsibility or liability for any damages whatsoever resulting from the use of this site in any manner.
