InvestSMART

Dividends

Your InvestSMART account will earn dividends through the exchange traded funds (ETFs) it holds. InvestSMART uses a broad range of ETFs across multiple asset classes: 

  • Australian shares,
  • International shares,
  • Property,
  • Bonds,
  • Term deposits and
  • Infrastrucure assets.

All of these investments earn income and that is paid to you as a distribution. All associated franking credits are passed through to you as well.

Distributions and dividends are paid by your underlying holdings into your Professionally Managed Account (PMA) on the payment day as announced to the Australian Stock Exchange (ASX). You can google the ASX ticker code and find this for each holding.

Franking credits that are due to you are passed on in full.

Please note that we quote the Ex-Dividend Date on the Dividends & Interest page.

Ex-Dividend Date

The Ex-Div date refers to the date you need to own the holding to receive the dividend. You will still receive the dividend if you sell the holding after the Ex-Div date but before the payment date. 

Payment Date

The Payment Date is usually several weeks later. The Payment Date is when you will physically receive the dividend cash amount into your investment account. If you have enabled Income Sweep, this income will be paid to your nominated bank account instead.

Above, you can see that ASX: AAA has an ex-dividend date of 1 July 2021; however, the payment date is 16 July 2021 (see Recent Distributions).

Income, when paid, is added to the cash holding of your PMA and either retained for investment at the next rebalancing date or accumulated to be paid out to your nominated bank account periodically (monthly) based on your preference. 

Step by Step

If you wish to amend your income preference at any time, click here or complete the following steps:

  • Navigate to Portfolio Actions
  • Select Investment Preferences 
  • Toggle the Income Sweep
  • Select Save Settings
  • Click Verify Request
  • Choose Email Verification or SMS Verification
  • Complete Verification Process

Yes, InvestSMART does provide automatic reinvestment for distributions, dividends, and interest. By default, when your holdings pay dividends, the funds will be added to the cash component of your account. If the cash balance becomes unbalanced, the default is to invest it into your other holdings.

So you don't have to reinvest your dividends and interest manually. InvestSMART takes care of it for you, helping you grow your investment portfolio over time. The reinvested funds are invested across your entire investment account, ensuring a balanced allocation and supporting portfolio growth.

Yes, you will receive the franking you're entitled to once you submit your tax return.

InvestSMART does not participate in dividend reinvestment plans. This means that the dividends from the holdings won't automatically be re-invested in the same holding they originated from.

When the dividends from your holdings are paid, they will go into the cash component of your account. When the cash component is out of balance, the default setting is for the cash to be invested across the other holdings.

Clients can elect to have the dividends paid out instead in a monthly income sweep. At the end of each month, all dividends and interest received by your account will be tallied and paid out to the bank account you nominated in your application form.

You can view dividends via the Dividends & Interest tab and Deposits & Withdrawals tab.

Yes, you can elect to have the dividends paid out instead in a monthly income sweep. At the end of each month, all dividends and interest received by your account will be tallied and paid out to the bank account you nominated in your application form.

You can turn on the Income Sweep setting in My Account > Investment Preferences.

InvestSMART does not participate in dividend reinvestment plans. This means that the dividends from the holdings won't automatically be re-invested in the same holding they originated from.

When the dividends from your holdings are paid, they will go into the cash component of your account. When the cash component is out of balance, the default setting is for the cash to be invested across the other holdings.

Clients can elect to have the dividends paid out instead in a monthly income sweep. At the end of each month, all dividends and interest received by your account will be tallied and paid out to the bank account you nominated in your application form.

You can turn on the Income Sweep setting in My Account > Investment Preferences.

Yes. When the dividends from your holdings are paid, they will go into the cash component of your account. When the cash component is out of balance, the default setting is for the cash to be invested across the other holdings.

Related topics

You can view and manage your InvestSMART PMA online. 

If you are already invested, visit the My Account section of the website and select My Investments to view:

  • Investment Summary
  • Current Holdings
  • Transactions
  • Dividends & Interest
  • Deposits & Withdrawals
  • InvestSMART Fees 
  • Allocation Preferences
  • Investment Preferences

Your portfolio data is updated daily. Please note, you will always see the previous days closing values.

You can switch between Model Portfolios or alter the combination of Model Portfolios on which your portfolio is constructed at any time. Your instruction will generally be acted upon during the next rebalancing date after receiving your request online.

You can submit this request by taking the following steps:

  • Click My Account and My Investments
  • Select Modify Allocations
  • Click Adjust My Allocation
  • Provide New Allocation Breakdown by Percentage (%) and then select Next
  • Select Verification and use preferred option - Email or SMS
  • Complete Verification

If your request requires additional funds to be transferred then the details will be shown in accordance with what you need to contribute along with the BPAY details unique to your investment account.

If you require assistance, please contact our friendly team via the chat function in the bottom right corner.

We are commonly asked by new clients browsing their holdings in the Portfolio Manager why they have physical cash sitting in their investment portfolio. Surely it should be invested in more shares? 

There are four reasons why this may be occurring: 

Cash Component

As referenced in our Product Disclosure Statement, every Professionally Managed Account (PMA) will hold, at the very least, 1% of the total account value in a cash component at all times.

InvestSMART draws upon this cash component to cover management fees and brokerage costs (if required), removing the need to unnecessarily sell down investments to cover the aforementioned expenses, which would be counterproductive to the progress of your investment. 

Portfolio Manager Discretion

At any point in time, the Portfolio Manager of any Model Portfolio has the discretion to adjust the holdings and weightings held, including physical cash. While this is more likely to impact active stock-picking portfolios rather than our capped-fee investment portfolios, it's not unusual to see 5% physical cash held by some models. 

Balanced Portfolio Allocation shown

Contributions or Income 

Over time your investments will pay dividends or distributions with the proceeds deposited into your cash component, and dependent on your income setting, it will either be accumulated and paid to your nominated bank account or held for reinvestment at the next rebalance. 

Contributions are also held similarly. They will be initially deposited into the cash component until there are enough available funds to trigger a rebalance of your holdings. 

The myth of "Full Investment"

Lastly, there is a common-sense reason why there might be a little more physical cash in your account. We aren't able to necessarily deploy every cent we'd like to due to the fluctuations in the price of underlying holdings on any one day, i.e. if we want to purchase $500 of ABC to rebalance your portfolio but only have $100 available, then we will have to hold fast for the time being. 

Remember:

This is a Professionally Managed Account (PMA), meaning that we manage this for you. Any trading, readjusting, rebalancing is done automatically by InvestSMART.

If you have any further questions or want clarification on the above topics, then please feel free to email us at invest@investsmart.com.au 

We sometimes get asked, "Why does portfolio performance differ from the model performance?"

Your account is designed to track the InvestSMART model portfolios you have chosen to invest in. We operate model portfolios with specific percentages assigned to the holdings and invest in the same holdings for your account to mirror the model. When the model holdings change so to will your account holdings.

Here are some common reasons why your investment return may differ from the model portfolio you are tracking:

Income sweep: If you have the Income Sweep turned on you are having the dividends paid out to you, therefore removing that cash from your portfolio. This may make it seem like your returns are lower than they are.

Your inception date: Our published model performance figures are based on month end values. For example, model performance may be +5% from 30 November to 31 December. If you established your portfolio on the 5th November and attempted to compare performance, your return may look quite different.

Adjusting/changing investment models: If you adjust your model weights during the performance reporting period, your returns may differ to our published performance. By adjusting models during the period, it becomes more difficult to obtain a like for like comparison against model performance returns.

Adding or withdrawing funds: Adding or withdrawing funds will see InvestSMART needing to buy or sell securities/shares in your account during the month. This will see you purchase or sell securities/shares at a price that may differ from the end of month price.

Size of portfolio balance: Our models operate off percentages. The larger the size of the portfolio the easier it is to match those percentages. Some accounts holdings may vary to model security weights as the high dollar value of a security (E.g., $100-600 depending on the ETF) means we can’t buy as many as is required to get close to the model weight. These residual amounts are therefore held as cash which has the effect of dampening returns when securities are going up. Of course, where securities fall, this has the effect of improving returns relative to model.

     

Actual Weight

 

 

Price per unit

Model Weight

$1m Portfolio

$100K Portfolio

$10K Portfolio

 

 

AAA

$50.07

14.00%

14.00%

13.97%

13.52%

IAF

$109.35

22.50%

22.49%

22.42%

21.87%

IFRA

$21.77

2.75%

2.75%

2.74%

2.61%

IOZ

$30.32

21.00%

21.00%

20.98%

20.92%

VAP

$93.00

2.75%

2.74%

2.70%

1.86%

VBND

$47.43

12.00%

12.00%

12.00%

11.86%

VGS

$105.04

24.00%

23.99%

23.95%

23.11%

CASH

$1.00

1.00%

1.02%

1.24%

4.25%

   

100.00%

100.00%

100.00%

100.00%

Brokerage: The investment models do not factor in brokerage. If you add funds, withdraw funds, or change investment model’s transactions occur and so do brokerage costs.