When we're talking about ex-dividend dates here at the Fool, we're usually talking about ASX shares. But exchange-traded funds (ETFs) can pay out dividends (called distributions) too. Thus, these investments have ex-dividend dates as well. Or more accurately, ex-distribution dates.
An ex-dividend date is the date that any new investors are cut off from receiving an upcoming dividend payment. It's simple — if you own share shares before the ex-dividend date, the dividend is yours. If you buy after the date, no dividend.
That's why we usually see a share that trades ex-dividend fall in value on the day in question.
So let's now talk about two ASX ETFs trading ex-distribution tomorrow.
These two cash-based ASX ETFs are going ex-distribution
The first is the iShares Core Cash ETF (ASX: BILL). Yes, ETFs can invest in cash too. This ETF from BlackRock puts investors' money to work in "high quality short-term money market instruments". The iShares Core Cash ETF pays out a distribution every month. Its latest payment is due on 16 December, and will be worth 24.02 cents per unit.
But investors will need to own units of this ETF tomorrow if they wish to receive this distribution. That will equate to a yield of around 0.24% on the current unit price of $100.56 (at the time of writing). Over the past 12 months, the iShares Core Cash ETF has a trialling yield of approximately 0.74%.
Our next ETF is also a cash-focused fund from BlackRock's iShares. The iShares Enhanced Cash ETF (ASX: ISEC) is a similar fund to the Core Cash ETF. However, it invests in "a diversified portfolio of higher-yielding high quality short-term money market instruments, including floating rate notes".
This ETF also pays out monthly distributions. Its next distribution is also due on 16 December, with the ex-dividend date set for tomorrow, 6 December. The iShares Enhanced Cash ETF will dole out 24.75 cents per unit, which would give investors a yield of 0.25% or so on today's unit pricing.
Over the past 12 months, this fund now has a trailing yield of 0.81%.
So tomorrow is a big day for these two cash-based ETFs on the ASX.
