What happens to the dividends in an ETF?

I haven't received any dividends from my ETFs like I do from mutual funds. What happens to the dividends they receive from underlying companies?
- AK Malik

Most ETFs reinvest the dividend proceeds that they get from the underlying securities. In India per se, there are very few ETFs that have a history of paying dividends and the ones that do, the mechanics are pretty similar to the way a dividend is distributed in the case of a stock. Typically, they announce a record date and the investors who are invested in the ETF on the record date, would be eligible to get those dividends.

This article was originally published on July 06, 2021.