A.I.M. Users Bulletin Board

[ls7550]

where they buy before market close , for ex-dividend date, so they "own" the stock to collect the dividend and then sell it the next day or so, pushing the price down.

Washes. On x-dividend the share price on average drops by the tax adjusted dividend amount. Been there myself but on the opposite side to try and avoid the dividend payment (sell just before x-div, buy back the x-div morning at a lower price). The US apply 30% withholding tax on US dividends to foreign investors (reduced to 15% for UK investors under US/UK tax treaty). No way to mitigate the tax so just as simple to pay it and then reclaim/offset it against other UK investment income taxes.

Re : S&P sectors. Whilst the S&P holds all 9 sectors (10 if you include telecoms, but generally you might roll that in with tech) and most sectors are relatively equally weighted, it is lighter on some of the sectors. Broadly however the S&P is one of the best choices of index structures around IMO. Others can become rather too heavily weighted into some sectors.

A problem is that funds like vanguard VUSA benchmark to S&P500N which is NET of 30% withholding taxes. As Ireland/UK pay only 15% withholding tax VUSA tends to outperform its benchmark after 0.1% or whatever fees are also included. But that's still 15% of the dividend amount less of a total return. Many however measure historic performance relative to gross index total returns and then see actuals lag that.

Funds (ETF's) that hold other funds, that hold foreign stocks - can have multiple layers of withholding taxes being absorbed. China for instance withholds 10% on both dividends and capital gains.

Just something to be aware of.