Purchasing dividend paying mutual funds eliminates the need to identify a handful of dividend paying stocks & provides instant diversification across
a whole basket of stocks.
When a non distributing ETF receives cash from the dividends of the companies, it takes that cash and reinvest it in
the whole basket of stocks that compose the index, not just in the companies that provided the dividends.
Not exact matches
As a forward - looking quantity, the equity - risk premium is theoretical and can not be known precisely, since no one knows how a particular
stock, a
basket of stocks, or the
stock market as a
whole will perform in the future.