Tag Archives: dividends

Can You Buy Additional Shares for No Fee Using a BMO InvestorLine DRIP?

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If you participate directly in a DRIP by registering your shares with the Transfer Agent (such as ComputerShare) for the stock, you may be able to purchase additional shares without paying any fee or commission at the time of each dividend reinvestment. For example, at the time this was written, you could purchase additional shares of Fortis. I wondered whether participants in a BMO InvestorLine synthetic DRIP could also purchase more shares when they received their quarterly dividends from Fortis. So I asked, using MyLink the secure email function.

Purchasing Additional Shares through a Genuine DRIP for No Fee

Although there is no discount on the price of shares under any circumstances, it is possible to buy additional shares in Fortis at the same time as the dividends are being re-invested.

That means additional shares can be purchased four times a year. It’s done by sending a cheque which must arrive at the transfer agent early enough to clear at least three business days before the dividend date. The shares will be purchased at the Average Market Price as defined in the Fortis DRIP agreement.

The financial advantage of making this type of purchase is that no brokerage fee or commission is required to make the purchase. So if it normally costs you $9.95 to purchase shares, you would save that $9.95 fee.

Is It Possible to Purchase Additional Shares through a Synthetic InvestorLine DRIP for No Fee?

Can I buy more shares in Fortis through the InvestorLine synthetic DRIP without paying any brokerage fee? Unfortunately, no.

The MyLink agent responded that, “Regretfully share purchase plans are not available for purchase through BMO InvestorLine.” I guess that’s my regret, not theirs!

So at this point, you are stuck with paying the commission when you want to buy additional shares in the same company. Regretfully.

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Can I DRIP the Dividends from my BlackRock iShares ETFs at BMO InvestorLine?

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BlackRock iShares ETFs are very popular with investors, with over 12 billion dollars invested in the S&P TSX Fund alone. Over the past few years, there has been some discussion on the internet about whether it is possible to use a synthetic Dividend Reinvestment Plan, DRIP, at BMO InvestorLine for iShares ETFs.

The answer is:

It depends.

Does InvestorLine Offer a DRIP for iShares XIU, XBB, XCB, XSB or XSP ETFs?

Three of the largest Canadian ETFs offered by iShares are the DEX Bond fund XBB, XCB and XSB. At the time this was written (2013 January), InvestorLine did not offer a DRIP for these ETFs.

UPDATE: February 2014: You can DRIP XBB, XCB and XSB at InvestorLine.

Two of the other largest Canadian ETFs offered by iShares are XIU based on the S&P TSX 60, and XSP based on the CAD-hedged S&P 500. These are also not available to DRIP through InvestorLine at this time.

UPDATE: February 2014: You can DRIP XIU and XSP at InvestorLine.

XRB, XHB, XGB, XLB, XFR, XSH, other iShares DEX bond funds, are also not available to DRIP.

UPDATE: February 2014: You can DRIP XRB, XHB, XGB, XLB, XFR, XSH and many other iShares funds at InvestorLine.

InvestorLine Does Offer a DRIP for iShares CBO, CLF, CBH, and CLG ETFs

You can set up a synthetic dividend reinvestment plan, however, for some iShares funds, including several of the laddered bond funds such as CBO, CLF, CLG and CBH. This is a synthetic DRIP, so your dividend will be used to purchase as many whole units of the fund as possible, and any balance will be paid into your cash account. You cannot buy fractional units.

InvestorLine Offers DRIPs for 2 of the 10 Largest (by NAV*) iShares ETFs

CBO is iShares sixth largest Canadian ETF.

InvestorLine also offers a DRIP for CPD the iShares SP/TSX Canadian Preferred Share Index Fund. This is iShares ninth largest Canadian ETF.

The Grand Total
In total, at this time, InvestorLine does offer a DRIP for 49 iShares funds. UPDATE: February, 2014: This number is now too large to bother counting.

Recommendation
If iShares ETF investing forms the core of your portfolio and you want to DRIP the dividends, you may want to call InvestorLine to confirm which ETFs it DRIPs before you transfer or open an account. The list of ETFs which qualify for a DRIP changes from time to time. It’s best to check directly with the source.

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Do you DRIP your iShares ETFs? Which brokerage do you use? Was it a factor in deciding with which brokerage to open an account? Please share your experiences with a comment.