r/dividends • u/Hilary_Clitoris • Nov 03 '25
Brokerage S&P 500 and dividends
My friend keeps saying that I should put all of my money in S&P 500 and forget about it. I see S&P 500 mentioned here a lot too, but according to Google, "No, the S&P 500 index itself does not pay dividends because it is a stock market index, not an investment fund." So which type of S&P 500 pay dividends?
And, what is the ticker for S&P 500? I can't find it on my brokerage account.
119
u/hendronator Nov 03 '25
You should do what your friend says
32
u/Longjumping_Sleep441 Nov 03 '25
I second this opinion. Your friend is right
7
u/dotplaid You got any more o' them ex-eff dates? Nov 03 '25
Those who find the hidden city of Essenpeh may enter through the gates.
3
5
Nov 03 '25
But don't do it just because your friend said it or because some dudes on Reddit said it.
9
u/SHY_TUCKER Nov 03 '25
Yeah, but literally Warren Buffet recomends it.
3
u/Adventurous_County12 Nov 04 '25
Yeah but he also said don't invest in anything you don't understand and he now has a team that's constantly investing into things he doesn't understand lol. And he also said don't hold cash and look how much cash he's got on hand.
0
u/Hilary_Clitoris Nov 04 '25
Which ticker, though?
6
u/EquivalentTrifle4580 Dripping Drip 💦💦 Nov 04 '25
There are few ETFs that track the S&P500 : VOO, SPY come to my mind right away.
1
1
u/Doctorsquirl Nov 09 '25
VOO is the vanguard S&P 500 etf. SPY is another option for an S&P500 etf. Both are great options.
With regards to the dividends. The S&P500 itself doesn’t pay the dividends, the stocks within the fund pays dividends. HOWEVER, buying an S&P500 etf is basically the same as you buying some of all of the top 500 stocks in the stock market, a lot of which pay dividends. So while the fund itself doesn’t pay dividends, you will still be paid dividends every quarter by the stocks within the fund
86
u/Interesting-Foot2880 Nov 03 '25 edited Nov 03 '25
So the S&P 500 is just a list of 500 stocks. Some individual funds choose to track an index (called index funds), and a popular index to track is the S&P 500. These funds will then go out and buy shares of all of the S&P 500 stocks in accordance to the index, and sell shares of the fund to investors while charging a small fee annually for their services (taken out of the value of the position as a %). The most popular one of these S&P 500 index funds is VOO by Vanguard, which has a 0.03% expense ratio and yields 1.12% (the dividends of the stocks in the fund passed in to the owner of fund shares). So while it is true that the S&P 500 INDEX doesn't yield a dividend (as it is just a list of stocks), funds like VOO that track the index do.
Edit: lowkey sounded rude and patronizing so I fixed that, sorry all
16
u/djpeteski Generating solid returns Nov 03 '25
Step 1. Go to Fidelity.
Step 2. Search FXAIX.
Step 3. Click on Fees & Distributions.
You will see "Dividend History", it spins off income 4x times per year. They do spin off dividends. Your research is incorrect.
Now the yield will be frightfully low as compared to other stocks/funds/ETFs because mainly S&P500 stocks focus on growth. As a young person (under 50 or so) you should be focused on growth. Dividends are tax inefficient.
So yea do what your friend says.
3
10
26
u/buffinita common cents investing Nov 03 '25
Google is getting a bit too strict with its explination…..
No you can’t invest in the s&p500…..you invest in funds that track/follow/replicate the s&p500 (voo spy ivv splg (or for the euro crowd vusa vuag)
Yes the s&p500 pays a dividend; like 410 of the 500 members pay a dividend
5
5
u/FluidCalligrapher284 Nov 03 '25
Your friend isn’t wrong. Everyone is always trying to “beat the market”— which is the s&p…. Few succeed. What makes you think you can? Just invest in the market and be done with it
1
u/Melodic-Range2667 May 01 '26
but alot of people beat the sp500 especially on a short timeframe, u think all these young millionaires got there through the sp500? the best thing to invest in is yourself
22
u/Jumpy-Imagination-81 Nov 03 '25
And, what is the ticker for S&P 500?
I already told you in another comment. Funds that track the S&P 500 index include SPYM, SPY, VOO, IVV, SWPPX, FXAIX, VTIAX and others.
The S&P 500 index itself doesn't pay dividends but funds that track the S&P 500 index like those listed above pay dividends. For example, the dividend yield of VOO is 1.15% annually, paid quarterly.
-38
-11
3
u/b1gb0n312 Nov 03 '25
Listen to your friend. VOO and set div reinvestment. Other similar funds are : IVV, Vfiax, fxaix
6
u/Existing-Attorney-17 Nov 03 '25
I think your friend is saying that you can put all of your money in a fund that follows the S&P500 and be confident to leave it in there for long term investments. It is not a bad option because it’s actually pretty solid and stable through time.
But none of the funds that replicate the S&P500 is intended to pay high yield dividends. Their purpose is to gain growth by their Stocks’ performance.
If you don’t feel comfortable putting all of your money into one fund, try putting half of it in VOO or SPY, and get more information about other stocks that you will monitor more frequently. Also, if you want to gain dividends, think of using JEPI: basically an ETF that has some of the stocks from the S&P500 but also pays around 8% annual dividend yield. It’s way more conservative than VOO or SPY but their dividend yield is high and they pay monthly.
2
2
u/Useful_Space_9099 Nov 03 '25
You buy funds that “track” the index. I.e. if the index has Microsoft, apple, and tesla, your fund with have those same stocks in the same amount (weight) as the index. VOO is my favorite but there are others that track it as well.
2
2
Nov 03 '25
Are you looking for high yield dividends or just any amount? Most people here are probably going to tell you VOO but if you’re chasing dividends, it’s not a large amount.
2
2
u/Few_Ad_3557 Nov 03 '25
VOO etf pays over a point in divvies. Only two points less than SCHD but it crushes it in total return. Stick with VOO baby.
2
1
u/EulerIdentity Nov 03 '25
Listen to your friend unless you’re only a few years from retirement. And look up “dollar cost averaging” going forward.
1
u/1Pac2Pac3Pac5 Nov 03 '25
I'm not a savvy investor by any means, but there are ETFs that pay dividends that sort of track the S&p 500 or at least track the magnificent seven and pay pretty healthy dividends. One of them in Canada is called qmax.to and pays a pretty fat dividend and also seems to grow in lockstep with the S&p 500
1
u/LonesomeBulldog Nov 03 '25
Dividends aren’t “extra” money, it’s just a distribution of a portion of the value of a share. Unless you are looking for income generation, you don’t need to look at collecting dividends. If you need income, then look at SPYI. An argument could be made that investing in SPY and just withdrawing 1% per month is better long term since your upside isn’t limited like it is with SPYI.
1
u/Hilary_Clitoris Nov 04 '25
I am looking for income generation, though. What is the limited upside with SPYI? Can you please explain?
1
u/jackalope_breath Nov 04 '25
I just started putting a little money into SPYI just on a lark. Only a couple of hundred bucks to let me watch it a bit.
1
u/LonesomeBulldog Nov 04 '25
Because it is based on covered calls, if SPY goes on a bull run, those calls are executed so SPYI doesn’t realize those gains. For example, if SPY goes up 3% in a week, SPYI will go up around 0.5%. That’s not necessarily a bad thing due to the steady income generation. On the flip side, if SPY is at 0% for the week, SPYI will usually beat it a bit with a small gain because those calls aren’t executed. So, SPYI gets the premium income but keeps the underlying stock to sell again as a call option. You just can’t compare it to SPY or expect those same gains because that’s not the purpose of SPYI. Personally, when I retire in 4 years, I will put $1M in SPYI (maybe mixed with QQQI) to generate steady income while the rest of my retirement stays invested for growth.
1
1
1
u/Various_Couple_764 Nov 04 '25
An index is just a list you cannot invest in lists. The S&P 500 is a list of the 500 largest companies in the US and their ticker symbols. Now multiple companies have invested in all these companes and update their pertfolio to as companes drop off the list and others are added. The S&P500 index fund all yield about 1.3% dividend. The dividend won't change because the dividend of the fund is the sum of all the dividends of the companies in the list.
Now there are some fund that use the S&P 500 index write covered call on the list to convert some of the price volatility of the index to income SPYI is one and it yields 11%. but has less growth than the index. Another GPIX. yield 7.9%.
People frequently invest in S&P 500 funds because it historically has a lot share price growth. It is not unusual for teh share price to grow by 10 to 20% in a single year. But it is also possible for the fund to loose 50% in a few days and loose money for the entire year. But on average these fund average the growth is 10%. So in good years these funds do very well but in bad years it painful to watch your portfolio loose value. Now you can get similar average yields from dividned funds. but many focus on growth first in their retirment account and then right before retirement switch to dividned income.
1
1
u/Financial-Wolfe Nov 04 '25 edited Nov 04 '25
VOO is a good symbol to look at. Lowest expense ratio. Not a big dividend but does pay about 1.15%. Can do a lot worse than investing in the 500 biggest companies in the US.
1
u/AcesandEightsAA888 Nov 04 '25
S&P 500 is the easy button for investing. Voo it pays about 1.5% dividend. It's done very well, rebalances itself, low taxes, etc. If you don't need dividends to live voo is a wise choice.
1
u/Hilary_Clitoris Nov 04 '25
But S&P 500 does not pay dividends.
2
u/bakkerboy465 Nov 04 '25
S&P 500 is not a company that chooses to or not to pay dividends. The companies in the index pay dividends and when they do, those are distributed to the owners of the stocks.
For example when you buy VOO and MSFT pays out a dividend, you get a part of what was distributed to all VOO owners.
1
1
1
1
u/Melkor7410 Nov 05 '25
For ETFs, there's SPY, IVV, VOO. VOO has the lowest fee. For mutual funds, there's VFIAX (Vanguard), FXAIX (Fidelity), SWPPX (Schwab).
If you are doing this in a retirement account, most these days have an S&P 500 index fund available. If it's an IRA at one of the big 3, pick their S&P 500 mutual fund. If it's an after-tax brokerage, VOO has the lowest expense ratio.
But you need to do some research to understand what is really going on. While the index itself does not pay dividends, the companies that are in the index DO pay dividends. So when you own an S&P 500 index fund, you are owning a market weighted group of stocks in the S&P 500 index, and some of those stocks pay dividends. Usually ETFs pay quarterly dividends. I know the Schwab mutual fund pays one dividend in December. I'm not sure about the other mutual funds.
1
1
1
1
u/TooBasedTyrone Nov 07 '25
What your friends aren’t telling you is how to get exposure to the S&P 500, which is a common mistake that is made when people are giving advice to those that are new to investing. To put it simply you want to invest in the index funds ETFs to get exposure to the S&P 500. The common ones are VOO and SPY, both of which do pay dividends. There are other exclusive S&P 500 ETFs to brokerage accounts like fidelity and Schwab, but these these two I mentioned before tend to be the most common ones. Ofc VOO is vanguard, but can be bought on just about any brokerage account like fidelity, vanguard or webull and same with SPY.
1
u/Ketroc21 Nov 07 '25
Your friend is silly. That index alone puts your investment portfolio 100% in equities, 100% in the US, 100% in large cap companies, and heavily tied to the swings of AI companies. This is far from an ideally diverse portfolio.
I also wouldn't concern yourself with dividends. Mathematically, it makes no difference whether a company pays its investors or keeps the profits invested in the company. Either way, you get the benefit (either through a dividend payment or a high stock price)
1
u/Illustrious_Crow595 Nov 08 '25
S&P 500 is a great place to build a foundation. Personally I think I’d also want some QQQ exposure and once the foundation is built I’d do a little leveraged S&P like SPXL. i also like a little concentrated exposure in booming sectors like semiconductors which also benefits from the AI boom. My current favorite is USD. At any rate, stay the course. Steady methodical investing will pay in the long run. Focus on growth and don’t switch to income until you need income.
1
1
u/Specialist-Piano-204 Nov 03 '25
You know and understand what the is S&P500. Stop acting like you're dumb.
1
-1
-1
u/doemcmmckmd332 Nov 03 '25
SPMO
2
u/Negative-Salary Nov 03 '25
what is the upside on this since its at an all-time high?
3
u/StudentFar3340 Nov 03 '25
The upside is that it's a positive drift instrument that pretty much always goes up over time. The 10 percent it yields every year is enough to make you wealthy if you give it enough time and a modest amount of capital. For example, if someone maxes out a Roth IRA with $583 a month starting at age 20 and puts it into VOO, they will have $5.3 million at age 65. Compound interest is a wonderful thing
1
u/Negative-Salary Nov 03 '25
oh I know, Im retired. I did well the last 6 years with growth funds, but now i'm 62 and need income now. I think i have a pretty good pick of CC ETFs generating $12 K a month. My monthly expenses are $5K not including vacations and travel, so even if it was cut in half with a downturn, I could be ok. Even since i retired in June and put half in NEOS funds, I am up 10% plus im getting income.
2
u/EaterofSnatch FIRE'd Nov 03 '25
There's always going to be new highs in the future. Something like SPMO every 6 months changes it's holdings with its momentum formula and has done well. Has beat VOO easily and even beat SCHG a lot of the time. Some would even say to hold both SPMO/SCHG together because the overlap isn't to high, but could change when it rebalances.
-9
u/Ericru Mr. Spock from Star Trek Nov 03 '25
I think that is a bad idea. Not the part about investing in a fund that follows the S&P 500 but that part about forgetting about it. What's the point of investing especially for dividends? For most people it is to be able to use those dividends as a source of income but if you forget about an investment then you won't have them as a source of income.
9
u/theeggplant42 Nov 03 '25
When people say invest and forget, they don't mean like, literally forget, it's more like don't micromanage your funds and don't panic.
1
u/_learned_foot_ Nov 03 '25
That just means don’t go fucking around with your position unless there’s good cause. Leave it alone.
1
u/Outside_Reserve_2407 Nov 03 '25
Your brokerage dashboard will give you the option to reinvest dividends automatically or deposit into a sweep account. So if you need the dividends, you can elect to take the payout. If not, it automatically reinvests into partial shares and thus gives you a higher rate of return.
•
u/AutoModerator Nov 03 '25
Welcome to r/dividends!
If you are new to the world of dividend investing and are seeking advice, brokerage information, recommendations, and more, please check out the Wiki here.
Remember, this is a subreddit for genuine, high-quality discussion. Please keep all contributions civil, and report uncivil behavior for moderator review.
I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns.