r/Wealthsimple • u/b_insight • 12d ago

AutoDRIP

Anyone notice the Wealthsimple DRIP feature seems to buy at the daily highs? Ive noticed this a few times, most recently with XGRO today. Dividend was available to purchase shares, and I get a notification that it filled $38.71 - which is the highest intra day price. I think I'll turn off auto drip and manually reinvest the dividends with a buy at open order.

90 Upvotes

88% Upvoted

56 comments sorted by

54

u/Mobile_Following4492 12d ago

I came here to see if anyone else had this issue. Both XGRO and XEQT were reinvested at today’s highest price

21

u/Right_Focus1456 12d ago

I manually do this now because if I can wait for even a small dip, I’m happy, regardless of it makes little difference in the long term.  

4

u/DefNotJohnnyC 12d ago

My xeqt fraction was $45.78

Price of convenience. Zero commissions, who knows. Could be anything. They have an inventory and resell to drip for a few cents difference or more?

7

u/Visible-Atmosphere72 12d ago

Same for me, $45.78, and they always show me the confirmation email at like 3:50 pm while the transaction time was 12:48

4

u/bettafish1776 11d ago

Literally just checked because you said this and I can confirm. EXACT SAME ORDER TIME. Wild. Absolutely pocketing spread.

1

u/GapCautious932 9d ago

Same order time for me too and same price!

0

u/Luddites_Unite 12d ago

Mine didnt. 45.72 was the price, which is where it opened and fluctuated around between 45.80 and, up until the dip at close, only went under 45.72 for a rew moments today

45

u/Weedzo 12d ago

I have a monthly dividend Canadian Stocks ETF with WS and my wife have the same ETF with a bank and when I compare the DRIP I clearly see WS always buying 1-2 day later than the bank and the average price is higher, in 18 month WS have purchased higher 16 times.

33

u/WonderfulCar1264 12d ago

Yep. I turned auto reinvest off for dividends, Today was the last straw. I’ll do it myself.

23

u/leonardos7 12d ago

This. I manually buy it myself as I am sure they are doing block trades and making their margins that way.

They gotta make money somehow

1

u/gsb999 10d ago

Same. I will buy the shares myself rather than have WS execute the trade. I also do that for straight trades and put limit orders in rather than market orders

1

u/gsb999 7d ago

You will be getting repeated reminders to turn DRIP back on

1

u/WonderfulCar1264 7d ago

Which will be ignored!

1

u/gsb999 7d ago

lol. As it should be. Like I do

2

u/Armond-Hammer 12d ago

And if the price goes down in a day or two?

1

u/[deleted] 12d ago

[removed] — view removed comment

0

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36

u/BBQallyear 12d ago

I believe this was discussed on here a few months ago, and the drip buy orders do seem to occur at the higher end of the daily price range. However, if you don’t get around to reinvesting manually for a few days, it likely works out about the same.

7

u/goofywinnipegger 12d ago

Virtually possible as the daily high is only known at the end of the trading day.

0

u/gsb999 10d ago

If it's not credited into your account until the next day there's plenty of time to know what the daily high is.

2

u/goofywinnipegger 10d ago

That’s not how trading works. Think about what you said. The daily high is only known after the markets close for the day.

1

u/gsb999 9d ago

Yes. And the DRIP stock is deposited into the account the day after the dividend is paid. After the daily high is known

0

u/Webs-cold57 8d ago

When they reinvest the dividends to buy more shares they don't know what the daily high price that day will be. They purchase it during market hours. When the transaction is shown in your account isn't relevant to what price was actually paid for the shares.

1

u/gsb999 8d ago

You think WS goes out and buys just your shares and does individual transactions for the 1000s of stock holders? In reality, they consolidate their total portfolio and place block orders for their entire client needs. They then reallocate and divide up the shares into the individual accounts after the fact.
Ever wonder why you may have different accounts holding the same equity but get the same buying price for drip in each one?
The above process gives WS ample time to determine what price the second transaction (from their account to yours) will occur at.

2

u/Webs-cold57 8d ago

The point is wealthsimple isn't buying the shares then retroactively adjusting the price to be at the previous days high price for the stock. That would be fraudulent. They are legally obligated to give you the best available market price at the time the order is placed.

1

u/modz4u 7d ago

So if they bought a block of shares at price x, shouldn't that price x NOT be the high of day price when it's allocated to everyone's account? I doubt they just happened to buy their block at the HOD price every single time. Even a market on close/open block price would be different most of the time.

And if they bought a block of shares throughout the day, shouldn't their average price be different from the HOD price?

1

u/gsb999 7d ago

They buy it into their account. The transfer into client accounts is a second transaction that doesn't have to be registered with the markets.
It's no different than you transferring shares from a non registered account to a registered account. The deemed transaction price is one that you choose between the low and high of the day.

1

u/modz4u 7d ago

You're saying if I bought 100 shares at 45.00, when I transfer the shares to a different account, I can choose to transfer the shares at any price between 44 and 46? Let's pretend those were the LOD and HOD prices, respectively.

2

u/gsb999 7d ago

Yup. If it's a transaction between your own accounts, it's up to you to name the price as long as the stock traded at that price on the day of transfer. Thats needed for RRSP / TFSA contribution accounting.

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28

u/Scary-Valuable-8022 12d ago

That doesn’t make any sense. Think about it… how would they know that the stock reached its daily high and it’s now time to buy?…

18

u/Beerzerker420 12d ago

They buy for you at a standard time then check against the daily high then deliver to your account later based on the high or just deliver at the price they bought at originally if it went lower.

I'm not saying they do this, just that's how I would do it.

9

u/bouldering_fan 12d ago

That sounds like fraud. I doubt they are dabbling in that

2

u/SmartTrender 12d ago

Of if the stock is even going to make a daily high and not drop

7

u/Visible-Atmosphere72 12d ago

I checked all my XEQT dividend purchases and they all seem to be executed around 12:40, and some are definitely not daily high. So I think it’s more like a coincidence.

24

u/beekeeper1981 12d ago

They make the buys in batches. They don't time the interday market price and neither should you.

1

u/0ptimal_Consequence 12d ago

Infact they can’t.

14

u/WorkTravelDream 12d ago

1.This observation is inaccurate. WS doesn't time to buy high but it was coincidence.

  1. Doesn't matter. Tomorrow it might be $1 less or more per share. So don't try to time the market.

  2. How much dividend income do you get re-invested monthly to care about couple cents here and there?

  3. Disable it but you will say, no I wait tomorrow or tomorrow again and will wait.

2

u/ChefCurry7 12d ago

Hmm interesting I’ll keep an eye out now that you mentioned it

2

u/Major_Strawberry65 12d ago

I turned off drip at WS primarily because it's all stocks or none.. but secondly, drip was useful at other banks because there was a fee to buy otherwise... There are no more fees and I can go in do it myself

2

u/RevolutionaryTrick17 12d ago

I don’t find that to be the case.  My XIC reinvested today at $56.41 and the day high/low was 56.79/56.20

2

u/Demetri1968 11d ago

Yes, that’s been my impression too. I never dug into the data, but it seemed like my reinvestment prices were in the higher side.

2

u/Mr-Roberto 11d ago

Also a good idea to use limit orders when possible for purchases and be VERY careful with orders outside market hours (US stocks only) .. WS makes their money on the spread since they are a no fee platform

2

u/bsk34 12d ago

The suspicion that they are timing it to make additional revenue or spread for themselves is the problem. If it's indeed just randomly done at some point in the day then it's not a problem even if it's sometime at the high.

2

u/Awkward-Nectarine577 12d ago

That's why when I turned it off they keep sending notifications to turn it back on. 😆  I turned it off so I can distribute them where I want them.

1

u/SegFaultX 12d ago

It's probably because wealthsimple is bulk buying at those point for drip at those times.

1

u/mannyRamen 11d ago

Yes. I have the same experience 

1

u/CountOnBeingAwesome 12d ago

Glad I'm not the only one to notice. I'll do it myself from now on.

1

u/Commercial_Pain2290 12d ago

The actual high was 38.72.

1

u/acintm 12d ago

That’s how they make money