Q: In a recent answer comparing the 2 ETFs, VFV & HXS, you said HXS does not pay any distribution. Does that mean it is like DRIP, instead of a dividend payment, your share holdings increase every quarter. Thanks … Cal
5i Research Answer:
No; in a DRIP, the dividend is paid but the money is used to buy more shares directly. The dividend is taxable. In HXS, the fund manager uses derivatives with a third party to swap dividends for capital gains. Thus, no distributions are paid, and no taxes apply until units are sold.
Authors of this answer, directors, partners and/or officers of 5i Research and/or affiliated companies have a financial or other interest in VFV.