Why Does My ETF Dividend Fluctuate So Much?

The total return from any investment can be broken down into two sources, dividends and capital gains. While it is important not to lose sight of the fact that we are ultimately most concerned about total return, it can be informative to track the source of returns between dividend yields and capital gains, particularly for income investors. If you are counting on a specific level of dividend per share from your exchange-traded fund, there is good reason to dig a little deeper into the details of fund operations.An ETF that owns stocks will collect the dividends based on the number of shares of the underlying companies it owns over the course of time. Periodically, it will pay out these collected dividends to its shareholders. But what happens when new ETF shares are created? For example, the WisdomTree Equity Income (DHS) had about 3.1 million shares... Read more