Dividends are a distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders. Watch these videos to learn more about dividends and how they may play a role in your portfolio.
If you own shares in an exchange-traded fund (ETF), you may receive distributions in the form of dividends.
To lower your tax rate on income, consider owning investments that pay qualified dividends. Qualified dividends are currently taxed at a maximum rate of 15 percent.
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Keep in mind that investing involves risk. The value of your investment will fluctuate over time, and you may gain or lose money.
Exchange-traded products (ETPs) are subject to market volatility and the risks of their underlying securities, which may include the risks associated with investing in smaller companies, foreign securities, commodities, and fixed income investments. Foreign securities are subject to interest rate, currency exchange rate, economic, and political risks, all of which are magnified in emerging markets. ETPs that target a small universe of securities, such as a specific region or market sector, are generally subject to greater market volatility, as well as to the specific risks associated with that sector, region, or other focus. ETPs that use derivatives, leverage, or complex investment strategies are subject to additional risks. The return of an index ETP is usually different from that of the index it tracks because of fees, expenses, and tracking error. An ETP may trade at a premium or discount to its net asset value (NAV) (or indicative value in the case of exchange-traded notes). The degree of liquidity can vary significantly from one ETP to another and losses may be magnified if no liquid market exists for the ETP's shares when attempting to sell them. Each ETP has a unique risk profile, detailed in its prospectus, offering circular, or similar material, which should be considered carefully when making investment decisions.