11-09-2014, 05:51 AM
(11-09-2014, 12:26 AM)Concasto Wrote: Yes, thats true, but they would only replace stocks of worse quality for better, assuming their qualitative methods actually pick better stocks. The dividends COULD go up or down, but considering the top 10 stocks(which make up about half of the fund) in this fund are strong DGI candidates, I would say it would be rare if they were to reduce the dividends.Robert explained it perfectly:
(11-07-2014, 02:32 PM)Robert_NL Wrote: This is the exact reason indeed. Also explains why it almost always happens in march, because they rebalance at the start of the year. They cut their winners and buy more of the stocks that lost previous year. This can (and almost always) will get you a smaller dividend.
Just like Robert explained when the funds re-balance their portfolios they need to get each holding back to the original weight.
This is why they sell the stocks that made more money (and usually - not always - payed more dividends) in order to buy stocks that made less money.