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Hi all,

If I purchased a ETF like XDV, and setup synthetic drip with TWDH, do I miss out on the discount offered by the actual companies behind the ETF? (for example, I've read that Telus has a 3% discount for DRIP)

Thanks,
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I can't imagine how you could be on a drip within an etf...it would seem logistically difficult to do so. Don't drips require some form of specific administration?? I believe they do...and it's likely that etf wouldn't provide it.
 

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Yes, you miss out on the discount you get with real DRIPs when you use a synthetic DRIP. This applies for ETFs as well as common shares.
 

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too bad that scotiaitrade does not offer PACs. i am considering opening a questrade a/c so i can make use of this.

in the meantime, the drips offered by claymore ETFs, are they semi synthetic? my assumption is the ETF would purchase additional units instead of giving out distributions, but the dividends from individual stocks themselves cannot be dripped. am i correct?
 

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too bad that scotiaitrade does not offer PACs. i am considering opening a questrade a/c so i can make use of this.

in the meantime, the drips offered by claymore ETFs, are they semi synthetic? my assumption is the ETF would purchase additional units instead of giving out distributions, but the dividends from individual stocks themselves cannot be dripped. am i correct?
It's all synthetic. Your distribution is translated into a number of shares rounded down deposited into your account, along with the cash from the 'partial' share. The main benefit here is that Claymore is swallowing the transaction cost, so you need not pay a commission.
 

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andrewf said:
The main benefit here is that Claymore is swallowing the transaction cost, so you need not pay a commission.
There's nothing special about that ... I've never heard of a DRIP program that charges a commission to reinvest dividends. At least, none of my brokers charge a commission.
 
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