Dont see a reason to pick accumulating over dist ?

C

coolaboola12

Registered User
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Hi All

Just a quick question , if you look at the ishares s+p distributing , its up the same % in value as the accumulating etf but yet if you buy the distributing one then you get dividend payouts also.

Can someone explain to me why someone would pick the accumulating one ? I would have thought it should increase in value more than the dist one but from the 1 year chart i looked at on degiro, it doesnt seem this way
 
You get the dividends with both, the accumulation one the dividends are automatically reinvested in the fund so in theory it’s increasing in value due to the dividends as well as the capital gains.

The main reason I avoid the distribution ones is that the dividends are treated the same way as any additional income for tax. So you have to allow for them in your tax returns as additional income.
 
I guess, to compare like with like, one is the uplifted value and the other is the uplifted value plus the dividend(s).

So if both show a 10% return and you stuck €100 in originally and got a dividend of €3 from one of them, that’s:

- €110 for the accumulating fund
- €107 plus €3 cash for the distributing fund

Both €110, both +10%

How that takes account of the dividend remaining invested versus being paid out in cash, I don’t know; as other posters have suggested, it must just assume that the dividends weren’t paid out and reflect that position.
 
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TheBig40 said:
The main reason I avoid the distribution ones is that the dividends are treated the same way as any additional income for tax. So you have to allow for them in your tax returns as additional income.
Click to expand...
For ETFs, dividends are taxed at 41%, which while similar, isn't actually like additional income. No prsi/usc is due.
 
Yeah but this is not what i see when i look at the charts (EAM). The one year chart for the dist fund shows a 39% increase in fund value over the last 12 months and the accumulating one is also 39%, so how i read that is

dist fund : 39% increase in value + dividends
accum fund : 39% increase in value

i must be missing something
 
coolaboola12 said:
Yeah but this is not what i see when i look at the charts (EAM). The one year chart for the dist fund shows a 39% increase in fund value over the last 12 months and the accumulating one is also 39%, so how i read that is

dist fund : 39% increase in value + dividends
accum fund : 39% increase in value

i must be missing something
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When I have compared the same ETFs ACC vs dis I see a difference. I never bothered to actually do the maths and see if it adds up but it should.
 
Well if you are looking at the Ishares website I think the returns they list include distributions. So makes sense that they are identical.

“Total return represents changes to the NAV and accounts for distributions from the fund”
 
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