Money Stuff: The Podcast · Friday, September 4, 2026
Foreign investors and hedge funds are reportedly engaging in a strategy to avoid U.S. dividend withholding taxes by utilizing the differing dividend payout schedules of two nearly identical S&P 500 ETFs: iShares Core S&P 500 ETF (IVV) and Vanguard S&P 500 ETF (VOO). The trade involves selling the ETF that pays dividends earlier and buying the one that pays later, effectively capturing the dividend value without incurring the tax.
“The U.S. has withholding tax on dividends for certain foreign investors, which I think includes a lot of, like, Cayman Sea investors.”
“And so, like, there's a trade. It's called the cash and carry trade. Although I always think of it as just the basis trade for S & P.”
“And the way you do the trade is you own if and then a day or two or three days before the dividend date, you get out of IV and into VU.”