Hey guys,
All securities in the strategies are traded on US exchanges and are subject to 30% withholding tax on dividends.
I was thinking to sell before the ex-dividend date to avoid be hit by the tax.
As far as I understand NAV will increase over time and dividend amount subtracted on ex-dividend date prior to open.
This strategy should work on bonds like TLT or TIP that actually have their ex-div date on 1st of the month. So selling might make sense as new allocation for next month might not have them in the strategy.
TLT currently has a yield of 2.2% on an investment of 100k that’s 660 of tax.
Granted to the open price on ex-div date might be low or higher due to buying / selling pressure. Fees are not an issue for me as each trade is 1$ with my broker. Any thoughts?