Vanguard Life Strategy Dividend

GiddyInvestor

I would like to ask a question regarding a small dividend shown on the Life Strategy range.
The 40% Equity Accumulation fund for instance shows a 1.34% distribution yield with ex-dividend date of April 3rd and payment date of May 31st but I don’t see how this works.

Since it is an accumulation fund I presume it would be paid directly back into my holding rather than as a pay out but I can’t see any sign of the fund price decreasing or increasing on the respective ex dividend or payment dates. Any comments would be appreciated.

SonOf

Since it is an accumulation fund I presume it would be paid directly back into my holding rather than as a pay out but I can’t see any sign of the fund price decreasing or increasing on the respective ex dividend or payment dates. Any comments would be appreciated.

With acc units you would not see anything as the unit price changes daily to reflect dividends received within the fund. Only if you had the inc units would actually see the distributions.

eskbanker

The way it manifests itself is that the value of Inc units (A below) drops when the dividends are [STRIKE]paid out[/STRIKE] declared, rather than Acc ones (B) visibly increasing as such:

GiddyInvestor

Thanks very much. I see now that it's visible in the incombe fund but not the accumulation.

EdSwippet

eskbanker wrote: »

The way it manifests itself is that the value of Inc units (A below) drops when the dividends are paid out, ...

Excellently demonstrated by the nice chart!

One tiny point, and I'm sure you know this, but just for the benefit of others ... the NAV of income units drops when dividends are declared -- the ex-dividend date -- rather than when paid out.