Dividends in practice (cash vs accumulating ETFs; ex-date & pay date)

A dividend is money a company or fund shares with investors from its profits. 

With a distributing (cash-paying) ETF, that cash is paid into your account on the pay date. 

With an accumulating ETF, the dividend isn’t paid out; it’s reinvested inside the fund, so you won’t see cash arrive, instead the ETF’s value reflects the reinvestment.

Two dates matter:

The ex-date is the cut-off for the upcoming dividend: if you buy on or after the ex-date, you won’t get that payment; you need to hold the ETF before the ex-date to be eligible. 

The pay date is when the dividend is actually paid (for distributing ETFs). This can be days or weeks after the ex-date, depending on the ETF’s schedule.