Investment Platform & SIPP Query

ColdIron

Dird wrote: »

This is the thing about ACC I find so strange/corrupt. The idea is you are re-investing so you should have a new share, not an inflated value of your existing shares.

When the ACC price increases but your units do not do you still get more dividend ££ as you would by re-investing INC dividends to buy more units?

In essence, your fund is made up of many separate holdings (companies) all paying different dividends at different times. These are rolled up within the fund which increases the value of each unit. On the payment date for the Inc fund these dividends are distributed reducing the value of the fund and hence the unit price. The Acc fund simply retains them

If you took the distributions from the Inc fund and purchased more units yourself you would have many units at a lower value rather than fewer units of a higher value. The total return is the same (barring trx fees if any)

This may help to explain
http://monevator.com/income-units-versus-accumulation-units-difference/

crazychamps

I want to thank everyone for your comments. I found it very helpful when making my final decision. I have since set up an account on CSD and have finally placed an order to buy the fund.

Out of curiosity, can I set up a standing order every month to deposit the £100-£250 as opposed to setting up a direct debit? Also, I suppose that I will then have to set up an automatic monthly purchase of the vanguard fund within CSD?

JohnRo

As long as the account details and reference are included SO should be no problem. It sometimes takes a day longer than it ought to when using a bank transfer as it's a manual process their end, so bear that in mind. Using a debit card is much quicker.

CSD will pull money using a DD on the 3rd work day each month and they transact regular investments on the 10th work day. Fees are taken monthly in arrears on the 1st work day.

crazychamps

JohnRo wrote: »

As long as the account details and reference are included SO should be no problem. It sometimes takes a day longer than it ought to when using a bank transfer as it's a manual process their end, so bear that in mind. Using a debit card is much quicker.

CSD will pull money using a DD on the 3rd work day each month and they transact regular investments on the 10th work day. Fees are taken monthly in arrears on the 1st work day.

Thanks John for the above info.

Does anyone happen to know how long the delay is between setting the order to purchase a fund and the order actually going through?

I set my order over the weekend and thought that it would have gone through on Monday. However checking tonight the transaction was still pending.