Invesco S&P Pure Growth ETF - decreased dividends

[PaunchyPirate]

I’m curious if anyone has some insights or theories as to why an ETF that I have owned for several years pretty much stopped casting off dividends in 2021 after a multi-year history of having them.

It’s not a big deal to me financially at all. But it has made me curious about what has changed.

I’ve attached a list of the quarterly distributions for the last 3 years. I’ve owned it for 2 additional years and the quarterly distributions are similar in size. For those years as well.

So there was a well established pattern of 4 distributions per year of about the same size (give or take). Then in 2020, they skipped the Q1, Q3, and Q4 distributions entirely and Q2 was tiny.

This is a high cost managed growth company ETF. I’d love to get rid of it and move the money into an index fund, but I’m avoiding the capital gains.

Back in April, when I posted about this topic on Bogleheads, someone indicated that the funds expenses must have been more than the dividends. That’s fine, I guess. But why this year all of a sudden? What happened?

Here is a link to the fund’s profile:
https://www.invesco.com/us/financial-products/etfs/product-detail?audienceType=Investor&ticker=RPG

Any thoughts?

 

[NW-Bound]

I think they have moved to growth stocks that pay little or no dividends. A quick look at their portfolio shows the following top holdings: Nvidia, Paypal, Etsy, SVB Financial, Generac Holdings, etc... Only Nvidia pays a puny 0.17% dividend, while the rest pay 0.

Well, that's what growth stocks do. You invest in them in hope for price appreciation, not dividends.

 

[PaunchyPirate]

I think they have moved to growth stocks that pay little or no dividends. A quick look at their portfolio shows the following top holdings: Nvidia, Paypal, Etsy, SVB Financial, Generac Holdings, etc... Only Nvidia pays a puny 0.17% dividend, while the rest pay 0.

Well, that's what growth stocks do. You invest in them in hope for price appreciation, not dividends.

I guess that must be it. It just seems odd that it changed so much in one year. The fund didn’t recently kick off any large amount of cap gains distributions if they made a large sell of older holdings into newer ones. But, I don’t monitor how much their holdings have changed thru time. I suppose they could have transitioned at a loss.

 

[MRG]

From the product details disclosure:

The Index measures the performance of securities that exhibit strong growth characteristics in the S&P 500[emoji2400]*Index. First, each security in the S&P 500 is assigned two “style scores” – one for value and one for growth – based on the characteristics of the issuer. The “value score” is measured using three factors: book-value-to-price ratio, earnings-to-price ratio, and sales-to-price ratio. The “growth score” is measured using three other factors: three-year sales per share growth, the three-year ratio of earnings per share change to price per share, and momentum (the 12-month percentage change in price). The ratio between the growth score and the value score is used to rank each stock as either deep value, blend or deep growth. Only the deep growth stocks are selected and are factor weighted such that securities demonstrating the strongest growth characteristics receive proportionally greater weights. The Fund and the Index are rebalanced annually

My guess is the index has different equities thar don't cast.off as many dividends.