Own iShares S&P 500 ETF (IVV) units? It’s payday for you!

Good news for investors in iShares S&P 500 ETF (ASX: IVV). The exchange-traded fund (ETF) — one of the largest on the ASX — is paying its latest distribution today.

Investing in ETFs allows us to own a whole group of businesses in a single investment, providing a good level of diversification. ETFs pass the dividends and distributions received from their holdings onto the fund’s investors.

So, let’s see what’s in store for eligible IVV ETF investors.

Final distribution for IVV ETF in FY24

Blackrock announced earlier in July that the FY24 final distribution for the iShares S&P 500 ETF would be 14.06 cents per unit.

The ex-distribution date for this payment was 1 July 2024, so investors needed to own units of the fund before this date to be entitled to the payout.

A distribution reinvestment plan (DRP) was open for this distribution, and investors had to sign up for it before today if they wanted to use it. Blackrock informed investors on 2 July 2024 that the unit price for new units issued under the DRP would be 54.45 cents.

Other distributions from FY24

The distribution that was paid three months ago to unitholders was 13.98 cents per unit.

Six months ago, the iShares S&P 500 ETF paid a distribution per unit of 15.98 cents per unit.

Nine months ago, the IVV ETF paid a distribution per unit of 17.3 cents to investors.

Strong capital growth

This ETF is not known for its passive income because its underlying holdings don’t offer high dividend yields.

According to Blackrock, the current 12-month trailing dividend yield of the IVV ETF is just 1.11%.

However, the iShares S&P 500 ETF has delivered strong returns in the last 12 months thanks to capital growth. The underlying performance of stocks like Microsoft, Nvidia, Alphabet, Amazon, Meta Platforms and Apple has been impressive — all increased by double-digit percentage terms over the past year.

The strength of the underlying holdings has helped the IVV ETF rise by 26% over the last 12 months, as shown in the chart above.

In contrast, the S&P/ASX 200 Index (ASX: XJO) has only climbed by 11% in the past year, so the US share market has significantly outperformed. However, past performance is not a guarantee of future performance, of course.

At the end of June 2024, the iShares S&P 500 ETF had a price/earnings (P/E) ratio of 27.3. This implies that the market is expecting strong earnings growth in the next couple of years to justify the current valuation.

The post Own iShares S&P 500 ETF (IVV) units? It’s payday for you! appeared first on The Motley Fool Australia.

More reading

• 5 excellent ASX ETFs to buy this month
• How did the iShares S&P 500 ETF (IVV) race ahead of the ASX 200 in FY 2024?
• Why it’s a big day for ASX ETFs
• Own the iShares S&P 500 ETF (IVV)? Here’s your next ASX dividend
• The iShares S&P 500 ETF (IVV) is slowly becoming a dividend powerhouse. Here’s why

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and iShares S&P 500 ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has recommended Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and iShares S&P 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.