How do ETFs pay dividends?

[dejavu619]

ETFs only track an index. How do they pay dividends? Is the mechanism similar to equity dividends? Thanks in advance...

 

[praveen98]

ETFs only track an index. How do they pay dividends? Is the mechanism similar to equity dividends? Thanks in advance...

Hi,
Yes ETF's track index as the funds will be invested in the constituent stocks as per their respective weightages...For example the amountsts received by NftyBees AMC will be invested in Nifty50 stocks as per their weightage in Nifty index.
For dividends please go through the following link

http://www.traderji.com/exchange-traded-funds/97788-etf-dividend-related.html#post1054192:clapping:

 

[dejavu619]

Thanks for your reply.

Also, if there are two ETF's and both are tracking SENSEX, how do I decide which one to buy? Should I only look at the expense ratio and price or are there any other parameters that I should consider?

 

[praveen98]

Thanks for your reply.

Also, if there are two ETF's and both are tracking SENSEX, how do I decide which one to buy? Should I only look at the expense ratio and price or are there any other parameters that I should consider?

Hi,
You can decide depending upon the liquidity,how closely it is tracking sensex in addition to what you have mentioned above....

All the best