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Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

Cash drag definition

Cash drag is a term associated with exchange trade funds (ETFs), referring to the delay between when an ETF receives a dividend and when it uses the proceeds.

There are two options for dividend payments in ETFs, which can be either reinvested into the ETF (known as accumulated distribution) or redistributed to the ETF’s shareholders (known as income distribution). In both instances, there may be cash drag between when the ETF provider receives the dividend payment to when they reinvest or distribute it. 

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Our ETF glossary teaches you about terms associated with ETF trading.

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See all glossary trading terms

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