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Accumulating Funds

Investment discussion for beginners. Why you should invest your money, get help getting started
JeffW55
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Accumulating Funds

#208170

Postby JeffW55 » March 17th, 2019, 11:21 am

Hi there,
Do accumulating investment funds reinvest any dividends received on a daily basis, maximising the opportunity for gains in a rising market, or do they, as I have started to suspect, collect the cash and reinvest it at the same time as the sister income units fund pays its dividend?
Or something else?
If I invest in a fund that has only accumulating units (e.g. iSHares North American Equity) how do I predict when the 'dividends' will apply (I remember from several years back being surprised by getting a tax cert for an accumulating fund with a specific date for the dividend payment).
Many thanks,
Jeff

RocketMan
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Re: Accumulating Funds

#208365

Postby RocketMan » March 18th, 2019, 11:19 am

Afternoon,

I believe the accumulation funds will reinvest on the same schedule as the income version. Meaning they don't instantly reinvest the dividends they let the cash build up until the pay out date, then they reinvest or pay out the dividend depending on the shareclass.

https://www.youinvest.co.uk/articles/sh ... tion-units

I haven't noticed different share classes with different dividend schedules.

Alaric
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Re: Accumulating Funds

#208377

Postby Alaric » March 18th, 2019, 11:50 am

RocketMan wrote:I believe the accumulation funds will reinvest on the same schedule as the income version. Meaning they don't instantly reinvest the dividends they let the cash build up until the pay out date, then they reinvest or pay out the dividend depending on the shareclass.


I think the rules regarding the creation of new units and the price at which these units are created require them to do this.

maroni
Posts: 1
Joined: July 29th, 2019, 11:21 am

Re: Accumulating Funds

#240104

Postby maroni » July 29th, 2019, 11:24 am

Got it!


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