M&G ACC or INC Funds

Axel

I currently have 3 M&G INC funds in an ISA which I want to move from M&G into my Interactive Investor ISA.

Am I better to switch these to ACC funds before I move them if I want the dividends reinvested? At the moment it appears to make no difference as my INC fund dividends are reivested anyway and I get more units at each payout. Not sure if this would change when I bring them into Interactive as my Interactive ISA account is set "hold in account". In iii all stocks in the account are treated the same for handling dividends and you cannot mix them. They also charge 1% for reinvesting dividends and I am not sure if this also applied to funds.

Any advice would be appreciated.

Note I am posting the query on this forum as I find the iii discussion forums almost impossible to navigate.

Ben

Totton

If you can switch to ACC for no additional cost then do it unless you need the payouts. Then rebalance the ACC funds when you feel they have distorted too far away from your original asset allocation.

If switching would add to your costs then stay with the INC versions but remember to factor in any additional costs that you may incur when re-purchasing. My personal choice is INC funds as I like to see what dividend was paid but ACC funds make more sense if you don't need the div.

HTH,
Mickey

barak

Totton wrote: »

If you can switch to ACC for no additional cost then do it unless you need the payouts.

I agree with Totton. While you are a direct client of M&G (or anyone else) they will - in my experience - allow you to switch to and from Income and Accumulation units in their own funds at no cost. Once you get your funds into a 'supermarket', it seems that you will be charged as if you were switching to a different fund altogether. So if you don't want/aren't going to get the income paid out to you, switch to Accumulation units now. Your statements will also look a lot simpler!