Trying to get my head around dividends in open ended funds...

[nmdhqbc]

In that case my post above stands, except that the word "bought" should be replaced with "created"

I'm pretty sure your example completely changes it so much to not address my question. You've added an ex divi before the second tranche. My question is about the effects on one dividend payment when there's a big inflow mid way through the divi collection period for that one dividend payment. Don't worry if I'm not explaining myself well enough for you to understand what I'm asking.

[tjh290633]

In that case my post above stands, except that the word "bought" should be replaced with "created"

I'm pretty sure your example completely changes it so much to not address my question. You've added an ex divi before the second tranche. My question is about the effects on one dividend payment when there's a big inflow mid way through the divi collection period for that one dividend payment. Don't worry if I'm not explaining myself well enough for you to understand what I'm asking.

You stated that 31 Jan was both the XD and payment day for the interim dividend. I have not added anything.

TJH

[nmdhqbc]

You stated that 31 Jan was both the XD and payment day for the interim dividend. I have not added anything.

Not quite but I think I know where that comes from. mc2fool's initial input prompted me to clarify that a few posts later...

Thanks for pointing out the errors. I'll try again. Hopefully this one is closer to making sense...

01JAN £400k in fund invested in companies paying £5000 Divis in Jan-Mar to be paid in one divi (400 units)
31JAN £2000 of those divs have been paid (40%) into fund but not yet to fund unit holders.
01FEB £400k added to fund and invested...
Fund now £800k paying what would have been £10000 Divis Jan-Mar (800 units) but...
40% of these have already been paid so 60% will be paid up to 31MAR = 0.6 x 10000 = £6000

Total Dividend = 2000 + 6000 = £8000

shared between 800 units = 8000 / 800 = £10
Without inflow = 5000 / 400 = £12.50

[nmdhqbc]

And later I thought I'd understood it as scenario 2 (or closer at least) below or I thought I did. Now I'm not sure again.

Scenario 1:
01JAN £400k in fund invested in companies paying £5000 Divis in Jan-Mar to be paid in one divi (400 units)
31JAN £2000 of those divs have been paid (40%) into fund but not yet to fund unit holders.
01FEB £400k added to fund and invested...
Fund now £800k paying what would have been £10000 Divis Jan-Mar (800 units) but...
40% of these have already been paid so 60% will be paid up to 31MAR = 0.6 x 10000 = £6000

Total Dividend = 2000 + 6000 = £8000

shared between 800 units = 8000 / 800 = £10
Without inflow = 5000 / 400 = £12.50


Scenario 2:
01JAN £400k in fund invested in companies paying £5000 Divis in Jan-Mar to be paid in one divi (400 units)
31JAN £2000 of those divs have been paid (40%) into fund but not yet to fund unit holders.
01FEB £400k added to fund and £398k invested... (£2000 set aside for next divi = Equalisation)
Fund now £800k paying what would have been £10000 Divis Jan-Mar (800 units) but...
40% of these have already been paid so 60% will be paid up to 31MAR = 0.6 x 10000 = £6000

Total Dividend = 2000 (Jan divis) + 2000 (Equal. Payment) + 6000 (Feb/Mar Divis) = £10000

shared between 800 units = 10000 / 800 = £12.50
Without inflow = 5000 / 400 = £12.50