XDIV ETF, S&P 500 with no dividends

[jim584672]

Interesting new ETF for those who need MAGI control.

"The Adviser seeks to manage the Fund’s portfolio such that the Fund does not pay dividends or otherwise distribute any income to shareholders each year."

"In order to implement its strategy, the Adviser seeks to manage its portfolio of shares of S&P 500 ETFs such that the Fund is not holding shares of an S&P 500 ETF as of market close on the day prior to its ex-dividend date."

The fund invests in VOO, SPLG, IVV, SPY.

S&P 500® No Dividend Target ETF | Aim to Reduce Taxable Distributions with XDIV

Stay invested in the S&P 500® without receiving dividends. XDIV offers tax efficiency, U.S. equity exposure, and a low 0.0849% net expense ratio.

www.roundhillinvestments.com

 

[ERD50]

It is interesting. I think I first learned of it from this thread (which I bookmarked, and it showed up below in the 'similar threads' section.

New Solutions to address Qualified Dividend Income Concerns

The genesis of this thread has been other posts through the years basically stating ... 'wouldn't it be great if there was an ETF that didn't generate qualified dividends.' The need for that depends on the poster. Some might be singles who are bombing through IRMAA brackets now that RMDs have...

www.early-retirement.org

I've been tracking it since inception (2025-07-10) on the site testfol.io. It's tracked very closely with SPY, neck and neck, sometimes above, sometimes below. However, it seems they are 'eating' some of the fees for now, so if that stops, the fees might kill any advantage?

I read how they manage to avoid divs, it's easier than I thought. The various SPY equivalent ETFs out there (like the VOO, SPLG, IVV, you listed - there may be more?) stagger their ex-div dates. So they just move from fund to fund once a quarter. I guess the ETF construct allows them to do this w/o incurring a realized cap gain/loss, it's all retained within the fund (unless Congress changes those rules).

But if the fees stay low, this could be a great option to avoid those taxable dividends if you don't need the cash flow. I'll be in that position once I start RMDs and my delayed pension next year (in addition to our current SS). My stocks/funds that pay divs (all except some BRK) have gains, so not worth selling them for XDIV, but I'll invest any excess cash there, if those fees aren't an issue going forward.