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XLF Special Dividend of XLRE

UPDATE: IB just updated the portfolio with the XLRE shares. Back testing question still applies as well as a warning that there was about an hour that the portfolio was not showing a correct value (which affected the automated trading this morning).

Slight panic this morning when I looked at XLF only to realize later that there is a special dividend that will be a distribution of XLRE shares (in order to reconstitute the index).

My question now is how to compensate for this in backtesting (since the XLF index constituents have significantly changed)?

Also (maybe a bug? EDIT:IB issue) the shares of XLRE are not showing up in the live trading IB portfolio today (since they are not paid until Sep 22?), so the total portfolio value is significantly lower! This affected the automated trading today since the true value of the portfolio was not known (nor were the XLRE shares showing up). Is this an IB issue? (EDIT:YES) Normally with cash dividends there is an accrual for the dividend payout (right?), but with a share dividend what is supposed to happen? (EDIT:Shares should have been added to the portfolio AT/BEFORE market opening)

Anybody else seeing/wondering about this?

1 response

Hmmm, I notice on TOS (TD Ameritrade), the one year chart for XLF looks all wrong. Maybe this is the reason? It shows a high of 24 something and current price of around 19ish.