XLE and its dividends

[systematictrader]

XLE for being a very high volume and low expense ratio as well as a diversified etf with the energy stocks it holds has an unusually high dividend thats after some
Companies in its holding have already cut the dividend its still at 7%,,, this is the first time i see such a high dividend of an etf with the above characteristics,, any thoughts?? How can this if potentially
Be a value trap with the amount of companies it holds ?? Ideas and thoughts welcome, this is for a medium term to long term
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[Amahrix]

who knows...if you’re interested, buy & hedge. If the hedge is expensive, don’t buy. This is based on principles. Opinions don’t matter and are of no value. My two cents.

 

[systematictrader]

who knows...if you’re interested, buy & hedge. If the hedge is expensive, don’t buy. This is based on principles. Opinions don’t matter and are of no value. My two cents.

Its not so much the hedge or the worry that its go down its the validity of the dividend being this high makes it attractive under any scenario specially when you got well over 10 companies underneath it, i am simply debating if i am seeing good value or a value trap,, even draw downs would be acceptable to pick up more,, its up 50% which is not necessarily odd since many others are up same thing but the fact its dividend is hefty

 

[DaveV]

XLE distributes it dividends quarterly, only on triple witching day. The cuts that the oil companies have recently announced won't be reflected in the XLE dividends posting until June 19th

 

[Sig]

XLE for being a very high volume and low expense ratio as well as a diversified etf with the energy stocks it holds has an unusually high dividend thats after some
Companies in its holding have already cut the dividend its still at 7%,,, this is the first time i see such a high dividend of an etf with the above characteristics,, any thoughts?? How can this if potentially
Be a value trap with the amount of companies it holds ?? Ideas and thoughts welcome, this is for a medium term to long term
Play

It sounds like you may be mistaking the last dividend as representative of the next dividend? Unlike a company that "sets" their dividend, an ETF just distributes what the underlying companies have paid out. If you're already into the accumulation period, then dividends already paid to the fund but not yet distributed to fund shareholders is reflected in NAV. And of course you realize that the fund NAV drops by the exact amount of the dividend the day it goes ex? Bottom line is that the dividend is all a wash, so rather pointless unless you're trying to do some esoteric tax play in a country where dividends are taxed lower than capital gains or something.

 

[systematictrader]

XLE distributes it dividends quarterly, only on triple witching day. The cuts that the oil companies have recently announced won't be reflected in the XLE dividends posting until June 19th

Where can one get the info on current dividend rate or amount and how ?

 

[systematictrader]

It sounds like you may be mistaking the last dividend as representative of the next dividend? Unlike a company that "sets" their dividend, an ETF just distributes what the underlying companies have paid out. If you're already into the accumulation period, then dividends already paid to the fund but not yet distributed to fund shareholders is reflected in NAV. And of course you realize that the fund NAV drops by the exact amount of the dividend the day it goes ex? Bottom line is that the dividend is all a wash, so rather pointless unless you're trying to do some esoteric tax play in a country where dividends are taxed lower than capital gains or something.

Appreciate the info, as far as underlying dropping by the same value of the dividend is the same case for all
Dividend payers no? The theory is the value recovers, appreciate the info, its been years since i touched something with dividend

 

[Sig]

Appreciate the info, as far as underlying dropping by the same value of the dividend is the same case for all
Dividend payers no? The theory is the value recovers, appreciate the info, its been years since i touched something with dividend

Yes, and IMHO dividends are absolutely pointless because of that.

 

[Atikon]

XLE for being a very high volume and low expense ratio as well as a diversified etf with the energy stocks it holds has an unusually high dividend thats after some
Companies in its holding have already cut the dividend its still at 7%,,, this is the first time i see such a high dividend of an etf with the above characteristics,, any thoughts?? How can this if potentially
Be a value trap with the amount of companies it holds ?? Ideas and thoughts welcome, this is for a medium term to long term
Play

IT's not like the money is gone in healthy companies right? Just reinvested. Dividends slash isn't seen as a bad signal during a time where politics call for it.

 

[systematictrader]

IT's not like the money is gone in healthy companies right? Just reinvested. Dividends slash isn't seen as a bad signal during a time where politics call for it.

Its not a bad signal its just that its perceived as such and causes investors to panic and get out but yes in long term it goes back to where its valued