Investments outside a tax shelter

[DrFfybes]

... I have a lot in this: https://www.morningstar.co.uk/uk/funds/snapshot/snapshot.aspx?id=F00000TXY8, HSBC FTSE All-World Index Fund Accumulation C. Morningstar doesn't appear to provide any ERI data. No doubt if I search I shall find re ERI...

... hmmm, I can't seem to locate ERI info for that HSBC fund that easily...

There won't be any.

ERI is only a thing for offshore reporting funds. Because all the ETFs in use in the UK are 'offshore' -- usually Ireland or Luxembourg domiciled -- it's a bugbear for practically all ETFs. Also for some funds and OEICs.

The plus side is you can add the ERI to the cost price when calculating CGT, like with Acc units. I have never looked, but if Acc units don't have ERI then they might actually be a simpler vehicle to manage.

Paul

[mrodent]

@TedSwippet

Ok that clarifies things greatly.

So I'm back to asking my original question at the top of this thread, and now find that the ERI thing is pretty much a red herring. The quest is to find "GBxxxxx... " ISIN funds, ideally funds not ETFs, the companies in which don't generate much in the way of dividends. Also preferably, very preferably, index funds. I **think** I can see the point of Vanguard publishing tables giving details of ERI for a given fund, particularly if domiciled outside the UK (e.g. in Ireland).

But what I really want is to latch on to an index fund which invests primarily in a class of assets like BRK.B, which just GROWS without sprouting irksome dividends.

If such a thing existed someone would probably have mentioned it by now...

[TedSwippet]

I have never looked, but if Acc units don't have ERI then they might actually be a simpler vehicle to manage.

Virtually all 'offshore' funds will have ERI. Being accumulating or distributing doesn't come into it. Vanguard's ERI information is here (specific instructions here). The 2022 report shows plenty of ERI on accumulating funds. Specifically for those funds though, the entire non-distributed (accumulated, reinvested) dividend is apparently reported as ERI.

As a general rule, I find distributing funds easier than accumulating ones to handle for tax. Doubly so when holding only UK domiciled funds, which entirely sidestep ERI. (I have a general dislike for having to pay tax now on money I have not (yet) received.)

[Lootman]

@TedSwippet

Ok that clarifies things greatly.

So I'm back to asking my original question at the top of this thread, and now find that the ERI thing is pretty much a red herring. The quest is to find "GBxxxxx... " ISIN funds, ideally funds not ETFs, the companies in which don't generate much in the way of dividends. Also preferably, very preferably, index funds. I **think** I can see the point of Vanguard publishing tables giving details of ERI for a given fund, particularly if domiciled outside the UK (e.g. in Ireland).

But what I really want is to latch on to an index fund which invests primarily in a class of assets like BRK.B, which just GROWS without sprouting irksome dividends.

If such a thing existed someone would probably have mentioned it by now...

I do not know if there are any funds that exist specifically to not pay dividends.

But whether ITs, ETFs or OEICs, you can generally sort lists of them by dividend yield to see which ones have a 0% yield. Monks and Scottish Mortgage are both global ITs that have yields well below 1%, for instance.

Many US tech funds will yield next to nothing since Amazon, Google, Facebook, Tesla, Nvidia, Adobe, Salesforce all pay no dividends, whilst Apple and MicroSoft both yield well under 1%.

[TedSwippet]

I do not know if there are any funds that exist specifically to not pay dividends.

Me neither. Particularly index funds.

Given the tax asymmetry, I've long been puzzled by the fact that there's a huge range of high-dividend funds, but an almost complete lack of the opposite, low-dividend (but high expected growth) funds. So much so that even a Google search for 'low dividend yield funds' returns nothing but high dividend ones.

It's almost as if UK investors prefer larger tax bills to smaller ones. Shrug.

[mrodent]

@TedSwippet

Well, I suppose Gideon only introduced the Dividend Tax in 2015 (I believe it was). Maybe in 8 years there just aren't enough rich people (with more money than ISA + SIPP allowance/sense) to have created a market of sufficient interest to the fund managers. Maybe those who are really REALLY rich prefer to get advisers to tell them about sneaky offshore trusts and a panoply of other devices.

But the US tech stocks idea is interesting. A typical Global index fund will naturally be quite heavily weighted in that area anyway, I think (Apple, Google, usual suspects). Will research it tomorrow.

Plus, as I understand things (not much), maybe there's an element of swings and roundabouts: what you avoid in Div Tax you end up having to pay CGT on. As SalvorHardin says in an earlier post, you do have to pay some tax.

[mrodent]

@TedSwippet

There is in fact some info out there... I just did a gsearch on ["low dividend yield" funds uk] (with those quotes).

One hit is a recent thread on this site, "Low Yield Portfolio"
viewtopic.php?f=8&t=40448

Some useful ideas there.

And ... just found out that CGT allowance is going down to a piddling £3000 next year. Hopefully Labour will be in this time next year but I can't see them raising that, obviously. Almost like the government wants to get significantly more tax out of us.

[GeoffF100]

Vanguard did launch some Ireland based factor ETFs, but it wound them up because of lack of interest. There may have been a growth factor ETF. Vanguard does have growth funds in the US. Nonetheless, I am not a believer in factor funds.

The best that I have is Vanguard Developed World ex UK, with a yield of 1.63% currently. (This year's dividend has already been announced.) If the government ends the CGT free status of gilts, I expect that I will stuff most of my unsheltered money into that fund, sell most of my sheltered equities and buy bonds in their place.