CLM DRIP at NAV with Fidelity
- Main Problem: Doc Tinsley is seeking confirmation on whether Fidelity will automatically reinvest dividends for the Cornerstone Strategic Value Fund (CLM) at NAV, as he believes this should happen according to the prospectus.
- Solution Provided: Fidelity clarified that dividends for ETFs like CLM are not automatically reinvested; instead, they are deposited as cash unless the user opts to change this setting.
- Steps to Change Dividend Settings: Users can modify how they receive dividends by logging into Fidelity’s website and navigating to “Accounts & Trade” > “Account Features” > “Dividends and Capital Gains.”
- Reinvestment Plan Details: Fidelity explained that CLM is part of the “Depository – No Discount” plan, meaning they do not influence the reinvestment price, which is determined by the transfer agent.
- Further Actions: Users are encouraged to contact the company’s Investor Relations for details about how dividend reinvestment prices are calculated and to review the fund’s prospectus for additional information.
Here’s the full thread
I was informed Fidelity will DRIP at NAV for CLM, without having to ask. Can I get confirmation on this, please.
Hi, I am happy to review the Dividend Reinvestment Program (DRIP).
The Cornerstone Strategic Value Fund (CLM) is an exchange-traded fund (ETF), so the dividends are not automatically reinvested.
By default, distributions from mutual funds are reinvested, while distributions from stocks or ETFs are deposited as cash into your core position. However, in most cases, you can choose how to receive these distributions.
To change how you receive dividends, log into Fidelity.com and take the following steps:
1. Expand the “Accounts & Trade” menu
2. Choose “Account Features”
3. Under “Brokerage & Trading,” click “manage” next to “Dividends and Capital Gains”
How to Change Dividends and Capital Gains Distributions: https://www.fidelity.com/customer-service/how-to-dividend-and-cap-gains-distributions
Let us know if there is anything else that we can help with! 🟢
I believe Doc Tinsley is asking that if DRIP is turned on for this fund will it Drip at NAV?NAV for this fund is considerably lower than the market price and per the prospectus should be reinvested at NAV.
Happy to clarify that!
First we need to go over the plan types for DRIPs. The two plans Fidelity offers for dividend reinvestment are the Fidelity Plan and the DTC Discount Plan. You cannot choose which plan to enroll in because a security is either DTC discount-eligible or not. Securities ineligible for the DTC Discount Plan automatically reinvest through the Fidelity Plan. The issuing company determines eligibility for the DTC discount. You can learn more about dividend reinvestment using the link below.
Dividend and Capital Gains Distributions: https://www.fidelity.com/customer-service/how-to-dividend-and-cap-gains-distributions
The Cornerstone Strategic Value Fund (CLM) is part of the “Depository – No Discount” plan for its dividend reinvestments. This reinvestment plan is an arrangement between the transfer agent and Fidelity, where we receive shares to allocate to clients for dividend reinvestment plans at prices that the transfer agent decides. Fidelity does not have a say, nor do we receive input from the company or transfer agent, on how the reinvestment price is calculated.
We recommend contacting the company’s Investor Relations department for further information on how their dividend reinvestment plan prices are calculated.
Additionally, we encourage you to review the Fund’s prospectus and check out the reinvestment policy listed on the “Distributions” tab of the research page at http://Fidelity.com. To access the research page for CLM, simply enter the symbol in the “Search or get a quote” box in the top right-hand corner of our site.
Let us know if you have further questions! 🟢