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Money Market Income funds
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Money Market Income funds
I am thinking of buying the Royal London Short Term Money Market Y Inc fund as it has a good yield of 5.25%. However, I notice the dividend is payed semi-annually (no idea when?). If I sell my fund before the dividend date or ex-dividend date will I still get the income? If I lose the income then presumably I would be better off buying into the accumulation fund as that accumulates on a daily basis.
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- Lemon Half
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Re: Money Market Income funds
KeepItSharp wrote:I am thinking of buying the Royal London Short Term Money Market Y Inc fund as it has a good yield of 5.25%. However, I notice the dividend is payed semi-annually (no idea when?). If I sell my fund before the dividend date or ex-dividend date will I still get the income? If I lose the income then presumably I would be better off buying into the accumulation fund as that accumulates on a daily basis.
If it works like a normal fund, the income rolls from the last XD date, so if you sell before XD the income is included in the unit price. If you sell XD, the price will have fallen by about the amount of income, which you will receive on the payment date. Either way you will not lose out.
TJH
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- Lemon Quarter
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Re: Money Market Income funds
KeepItSharp wrote:I am thinking of buying the Royal London Short Term Money Market Y Inc fund as it has a good yield of 5.25%. However, I notice the dividend is payed semi-annually (no idea when?). If I sell my fund before the dividend date or ex-dividend date will I still get the income? If I lose the income then presumably I would be better off buying into the accumulation fund as that accumulates on a daily basis.
The historical yield is not the return that you will actually receive. If you sell before the ex-dividend date, you get a capital gain. Dividends are paid on 30 June and 31 December. The accumulation version does not reinvest income on a daily basis. It reinvests when the dividend is paid for the distributing version. You still have to pay income tax on the dividends with the accumulating version, but you can add them to your capital gains base cost. It is easier to work out the tax for the distributing version, but you then have to take account of Equalisation. Here is an article about the Vanguard fund:
https://www.vanguardinvestor.co.uk/arti ... arket-fund
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Re: Money Market Income funds
"It is easier to work out the tax for the distributing version, but you then have to take account of Equalisation. "
Thanks for that. The equalisation is another thing I hadn't considered but it makes sense that it has to be done.
Thanks for that. The equalisation is another thing I hadn't considered but it makes sense that it has to be done.
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- Lemon Half
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Re: Money Market Income funds
https://www.hl.co.uk/funds/fund-discoun ... s-y-income
Ex Dividend 1st May 2024 Pay 30th June 2024
Ex Dividend 1st Nov 2024 Pay 31st Dec 2024
Ex Dividend 1st May 2024 Pay 30th June 2024
Ex Dividend 1st Nov 2024 Pay 31st Dec 2024
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