Dividends in my M1 Portfolio

Dividends

How do dividends work?

Your M1 Portfolio will display your dividends in two places: 

  1. Portfolio Tab: You will see your dividends in your portfolio tab when they are earned. It will be displayed in your portfolio with the title earned dividends.
  2. Activity Tab: When dividends are paid, you will see the dividends paid by each security in your activity feed.

    Paid dividends will collect in your cash balance.

    If a dividend payment causes your cash balance to exceed your cash control threshold, your cash balance will be automatically invested in your portfolio based on your target allocations. 

Earned vs. Paid

Your earned dividends (which appear in Portfolio gain) and your paid dividends (which appear in activity) are different.  

All dividends will be earned before they are paid. 

A dividend has two important dates: ex-dividend and payable. 

Ex-dividend date 

The first day a stock or fund trades without the dividend attached. Investors must have purchased a security prior to the ex dividend date to be eligible for the dividend payment.

Payable date 

The day a dividend will be paid to a stock or fund owner.  

It will always be after the ex-dividend date. 

Example: 

Stock ABC has an ex-dividend date on 1/15 and a Payable date on 1/25. 

Stacy bought a share of ABC on 1/14 and Eddie bought a share of ABC on 1/15 

Stacy is owed the dividend and Eddie is not. Stacy will be paid the dividend on 1/25. Between 1/15 and 1/25, Stacy will have earned the dividend, but it hasn't been paid. 

You will always earn your dividends before they are paid. 

 

Negative Dividends

If you see a dividend reflected on your recent account activity that displays a negative dollar value, what you are seeing is an American Depositary Receipt (ADR) fee 

ADRs allow US investors to invest in foreign securities.   

When you own an ADR, a custodian oversees the ADR and maintains the records.  

The custodian collects the dividends paid out to the foreign issuer, converts them into US dollars, and deposits them into your account.  

The custodian charges a fee for all these services and this fee is called the ADR fee. 

 

If you have further questions, please contact us.

 

All examples above are for informational purposes and should not be considered an offer to buy or sell certain securities. M1 does not provide investment advice.

 

M1 disclosures here.

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