I read a post recently though where someone referred to "unitisation of income units" (or something similar to that). A quick search & re-reading the guidance on the http://lemonfoolfinancialsoftware.weebly.com/unitising-a-portfolio.html page led me to the definitions below about dividend reinvestment.
With accumulation units
...
dividend income received and retained in the portfolio increases the price of each unit but has no effect on the number of units
...
With income units
...
dividend income received and retained in the portfolio increases the number of units owned, but does not affect the price of each unit
...
For my own portfolio, it's all accumulation funds apart from a couple of ETF's. I've always assumed that since I reinvested the ETF dividends (usually by buying more of an accumulation fund as they generally weren't enough to cover the cost of a whole unit of an ETF), the money never left my account so I didn't increase the number of units owned in my unitisation spreadsheet; the dividends just increased the overall price per unit. Reading the above though, I'm unclear as to whether ETF's count as "income units" because they pay out dividends.
Could someone clarify for me the difference between income & accumulation units please?
Many thanks, iambic