11 posts were split to a new topic: Administering fractional shares
Looking forward to auto reinvestment of dividends too - any idea on when this feature may be released?
We don’t have a timescale for this yet, we’ll share the news here: Drip (automatically reinvesting dividends) when we do!
Ok no problem, cheers Alex
What happens when a share costs £50 and you get 3 orders of £25?
I have a question regarding dividend payouts - if I own just a fraction of a share in a company that wants to pay out dividens, how does this work?
Thanks in advance!
Hi Pavla, you would receive your percentage portion of the dividend - so 50% of a share would mean 50% of the dividend paid out per share
Will you be able to buy fractional shares in a ISA?
Yes you will
Will ETF’s be available in fractions ?
Yes they will
This is great news! While my original reason for wanting this functionality was for the crazy US per share prices, it’s an excellent point about being able to reinvest dividends. Combined with Freetrade’s fee structure, this will allow people to create genuinely diverse portfolios with any level of capital. Game changing IMO.
Not sure about other brokers but Halifax offers dividend reinvestment that results in fractional shares via the ShareBuilder option.
A few questions that came to mind…
Will we pay stamp duty on fractions?
Can you buy fractions in an ISA?
Could Fractional US shares could be sold in £, avoiding the 0.45% FX fee on buying and selling we’ve all come to love?
Buying and selling fractions works the same was as ordering whole shares, when it comes to the FX conversion (which is not a fee).
When a stock splits its price, what happens to fractional share holders?
Double the stock, half the price. (Assuming 2:1 split) What else could it possibly be? I don’t see how it is relevant that it’s fractions.
Say a stock made a 3:1 split and you were invested fractionally say 33% into one stock, would you receive 99% after the split in total?
I am asking for myself and for anybody else that did not study finance.
If it was to be done that way, most likely you will get whatever it is rounded down to a single penny. Probably if it was a $436.75 stock of which you own 33% [$145.58], a 3:1 split will get you three shares worth $48.52 or $48.53. Would be prudent to assume it will be the former.