Selling Accumulation Funds after the Ex-Dividend date

PParka

Hi,

Could anyone advise me how Accumulation funds work if I sell between the Ex-Dividend date and the Payment date?

Basically, I'm thinking of selling some of my funds. The funds are Accumulation funds, so there is no paid dividend as such.

The Ex-Dividend date is the 1st January and the Payment date is the 28th February.
If I sell them before the 28th, do I lose out? Or does it make no difference?

Thanks in advance.

fozzeh

You need to be on the register on the record date (usually 2 days after ex, Wednesday and Friday respectively moer often than not).

It depends on the specification of the fund (whether you have to pay a !!!-dividend proportion to the new holder) but I would think you'd get the dividend for the period prior at least. What stock is it (ISIN, SEDOL or name will do)?

Richard_DandR

Unit trust (and OEIC) prices include income earned since the last accounting date. On the xd date, the income is stripped out of the income share price and, two months later, distributed to unit holders as cash.

The income included in the accumulation price is automatically transferred into capital. Hence, if the stock market does not move, the income price would show a fall on the xd date while the accumulation price would remain unchanged.

Over time, the differential between the income share price and accumulation share price widens and this represents all the accumulations of income since launch.

If you sell on or after the xd date, you will receive the income as part of the sale proceeds.