iShares GBP Ultrashort Bond (Dist) ERNS

Can someone please tell me: If I sell these what happens to the dividends which are held which have not yet matured?


The income received by the etf from the bonds is distributed twice a year. There isn’t another distribution until June; the last one was in December. Other than that there is no entitlement to the bond income that isn’t due to be distributed yet, but the price of the etf will have moved partly due to the approaching of the next dividend, i.e. tending to go up to reflect that another distribution is due sooner. It may not be obvious because other things can affect the net asset value and hence the price as well. (The bond prices can go up and down in the market.) Hope this explains.

There are two dates the ex-dividend date and the (later) payment date. At beginning of the ex-dividend date you can expect the price to drop to match the distribution (on average). The distribution will still be payable later on the payment date if you hold it at on the ex-dividend date.

So the timing of reducing holding doesn’t make much difference overall. It’s just if you wanted to wait until the payment date to get all your cash in one go the for convenience, then what you are saying is right.

But personally I would just reduce it at the time when I first recognised that I wanted to reduce it, then it just means I get the cash from the sale and potentially get a little more cash from the distribution later. I wouldn’t wait for the payment date even if the ex-dividend date has passed. In my opinion, the preferred timing of the sale is more important than the convenience factor.

I’m not sure how clear I’m being. I’d suggest doing a search and reading up about record dates, ex-dividend dates and payment dates if you aren’t very familiar with them. Then I think you’ll see the whole picture for yourself and be able to make the decision that’s right for you. I’m not fobbing you off though. If you do want to ask anything further on it I’ll see if I can answer.

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That was a helpful reply.
Thank you for taking so much time and trouble.