Another stupid question about dividends

Roger175

I posted recently about how dividends were paid on shares and received some helpful advice.

I'm hoping somebody can also help with this one - I have a HL Isa in which I have invested in various funds.

My question is how dividends are dealt with on funds - until now I had always assumed that with OEIC funds, the dividends were effectively paid internally and reflected in the fund value, but when looking at some of my holdings recently I've noticed it states there is a dividend paid and give payment dates etc.

Take for example, the Newton Income Class A Retail Accumulation Fund, this states that there is a historic yield of 4.66% paid bi-monthly, the payment date being 28th Feb. (sorry, can't post link)

Am I reading it correctly that on 28th Feb (and 28th Aug for interim) I should be getting a dividend paid?

Your advice appreciated.

Roger

le_loup

No.
You are right to think dividends are rolled up into the price, BUT only on acc funds which you seem to have. The inc version of you fund would actually pay out on the payment date.

Roger175

Thanks for the reply - not sure I understand it, but I'll do some research

xylophone

Many funds come in two versions, income units and accumulation units - if you have income units then you receive income "in your hand" as it were - if you have accumulation units then the income is rolled up into the fund and gradually the value of the acc units increases.

Go into HL website and run inc against acc on a graph.

Roger175

Thank you, yes, I understand about income and accumulation units, but hadn't realised that's what Le loup was referring to, even though it's obvious now I think about it!. I have always bought accumulation units - it's just that the factsheets for the accomulation units state about the dividents - I guess it's basically the same factsheet, whether you are looking at the income or accumulation units. All now clear thanks

le_loup

A fund is a fund and a fact sheet is a fact sheet. Many funds have different sorts of units in the fund.

Vortigern

On the dividend payment dates shown on the factsheet, should one see a step increase in the price of the accumulation units?

le_loup

No.
What you will see is a drop in the inc units.
(Not payment dates - xd dates.)