Next divided for funds

bowlhead99

aroominyork said:

I never asked them, bowlhead. It was only curiosity/interest. I'm not strategising how to invest the dividend on a bi-annual distribution on 5% of my portfolio from a low income part of the world! 

This is also why we are not generally minded to put more than a few hundred words of effort into offering potential solutions to you

aroominyork

Is that the royal We? 

bogleboogle

Hi, I have the FTSE GAC (Accumulation) - it says the yield as at 30th June 2020 was 1.87%. How does that work in terms of my holdings - I can't seem to see the 1.87% being paid? Is it just automatically re-invested in the fund? If so, wouldn't I expect to see a 1.87% in the NAV on that date? 
Thanks

83705628

bogleboogle said:

Hi, I have the FTSE GAC (Accumulation) - it says the yield as at 30th June 2020 was 1.87%. How does that work in terms of my holdings - I can't seem to see the 1.87% being paid? Is it just automatically re-invested in the fund? If so, wouldn't I expect to see a 1.87% in the NAV on that date? 
Thanks

/
A. If it says accumulation then yes you're part right, whatever dividends Vanguard collects, Vanguard will use to buy more shares of the companies in the fund. If you want the dividend you need to buy the income share class of the fund.
B. The 1.87% is never quite accurate. For an accurate dividend yield lookup the index factsheet on ftserussell.com. Currently 2.46% (before any of the fund charges, transaction expenses and platform fee).
C. On the fund's performance page (I'm assuming you're looking at Vanguardinvestor.Co.uk, you won't see "+1.87% dividends anywhere". I've attached a screenshot of the annual performance figures for the income version of the fund which does show the capital and dividend returns separately.
D. Happy to explain if you're arsed about more detail, I'm on holiday so cba atm

bogleboogle

@tcallaghan93 thanks for your reply. 

on the "Distributions" page it says "Yield As at close 30 Jun 2020 1.87%". Basically, my question is: where do I see this reflected in my account? At first I thought this means that on 30 Jun 2020 each account gets 1.87% invested into new units (so someone with £10,000 in GAC would receive £187 in new units), but it doesn't look like that's the case, so how does it work? 

83705628

bogleboogle said:

@tcallaghan93 thanks for your reply. 

on the "Distributions" page it says "Yield As at close 30 Jun 2020 1.87%". Basically, my question is: where do I see this reflected in my account? At first I thought this means that on 30 Jun 2020 each account gets 1.87% invested into new units (so someone with £10,000 in GAC would receive £187 in new units), but it doesn't look like that's the case, so how does it work? 

/
Happy to help, this took me a while to get my head around too.
I wish it paid out 1.87% a month 😍
Sorry about the CAPS, they're for emphasis I just cba with italics
You've bought, I think, the accumulation shares class of the fund. The FUND, not the platform automatically reinvests the dividends WITHIN THE FUND without you ever seeing them in your account.
You won't see this in your account.
1.87% is the ANNUAL rate, and it's the FUND's dividend. This particular fund has decided to distribute annually because it's easier than paying out the dividends when it receives them because then it would literally be paying out tiny amounts of money everyday. Apple dividends one day, Toyota the next, Nestle the next... It would be impossible to manage that.
1.87%  the last dividend the fund paid out divided by the fund's price on 30/6/20.
If you look at the income share class (https://www.vanguardinvestor.co.uk/investments/vanguard-ftse-global-all-cap-index-fund-gbp-inc/overview), look at the distribution amount of £2.443 and divide by the  price & performance NAV for 30/6/20 £128.32, the answer is 1.90%, exactly the same as on the distributions page.
The number for the accumulation fund, 1.87%, is always slightly different but this is just how that's worked out, it would never affect the actual return you get.
The GENERAL advice is if you're retired and you want the income, buy the income fund. If you're still saving up, buy the accumulation fund. But it's upto you you can do whatever you want, no right or wrong answers. And it won't make a difference, a retiree could just hold the acc fund and sell units for income. A saver could buy the Inc fund and use the dividends to buy another fund, or leave as cash, whatever you want.

83705628

See attached

bogleboogle

tcallaghan93 said:

bogleboogle said:

@tcallaghan93 thanks for your reply. 

on the "Distributions" page it says "Yield As at close 30 Jun 2020 1.87%". Basically, my question is: where do I see this reflected in my account? At first I thought this means that on 30 Jun 2020 each account gets 1.87% invested into new units (so someone with £10,000 in GAC would receive £187 in new units), but it doesn't look like that's the case, so how does it work? 

/
Happy to help, this took me a while to get my head around too.
I wish it paid out 1.87% a month 😍
Sorry about the CAPS, they're for emphasis I just cba with italics
You've bought, I think, the accumulation shares class of the fund. The FUND, not the platform automatically reinvests the dividends WITHIN THE FUND without you ever seeing them in your account.
You won't see this in your account.
1.87% is the ANNUAL rate, and it's the FUND's dividend. This particular fund has decided to distribute annually because it's easier than paying out the dividends when it receives them because then it would literally be paying out tiny amounts of money everyday. Apple dividends one day, Toyota the next, Nestle the next... It would be impossible to manage that.
1.87%  the last dividend the fund paid out divided by the fund's price on 30/6/20.
If you look at the income share class (https://www.vanguardinvestor.co.uk/investments/vanguard-ftse-global-all-cap-index-fund-gbp-inc/overview), look at the distribution amount of £2.443 and divide by the  price & performance NAV for 30/6/20 £128.32, the answer is 1.90%, exactly the same as on the distributions page.
The number for the accumulation fund, 1.87%, is always slightly different but this is just how that's worked out, it would never affect the actual return you get.
The GENERAL advice is if you're retired and you want the income, buy the income fund. If you're still saving up, buy the accumulation fund. But it's upto you you can do whatever you want, no right or wrong answers. And it won't make a difference, a retiree could just hold the acc fund and sell units for income. A saver could buy the Inc fund and use the dividends to buy another fund, or leave as cash, whatever you want.

Yes I have the accumulation fund. The fund reinvests the dividend within the fund (presumably on my behalf) but I don't see it reflected in my account anywhere? So how does it benefit me? I guess I still don't understand how it works - if the fund reinvests the yield/dividend automatically then I should see that reflected somewhere (e.g. the NAV, or me receiving more units), no?  

83705628

bogleboogle said:

tcallaghan93 said:

bogleboogle said:

@tcallaghan93 thanks for your reply. 

on the "Distributions" page it says "Yield As at close 30 Jun 2020 1.87%". Basically, my question is: where do I see this reflected in my account? At first I thought this means that on 30 Jun 2020 each account gets 1.87% invested into new units (so someone with £10,000 in GAC would receive £187 in new units), but it doesn't look like that's the case, so how does it work? 

/
Happy to help, this took me a while to get my head around too.
I wish it paid out 1.87% a month 😍
Sorry about the CAPS, they're for emphasis I just cba with italics
You've bought, I think, the accumulation shares class of the fund. The FUND, not the platform automatically reinvests the dividends WITHIN THE FUND without you ever seeing them in your account.
You won't see this in your account.
1.87% is the ANNUAL rate, and it's the FUND's dividend. This particular fund has decided to distribute annually because it's easier than paying out the dividends when it receives them because then it would literally be paying out tiny amounts of money everyday. Apple dividends one day, Toyota the next, Nestle the next... It would be impossible to manage that.
1.87%  the last dividend the fund paid out divided by the fund's price on 30/6/20.
If you look at the income share class (https://www.vanguardinvestor.co.uk/investments/vanguard-ftse-global-all-cap-index-fund-gbp-inc/overview), look at the distribution amount of £2.443 and divide by the  price & performance NAV for 30/6/20 £128.32, the answer is 1.90%, exactly the same as on the distributions page.
The number for the accumulation fund, 1.87%, is always slightly different but this is just how that's worked out, it would never affect the actual return you get.
The GENERAL advice is if you're retired and you want the income, buy the income fund. If you're still saving up, buy the accumulation fund. But it's upto you you can do whatever you want, no right or wrong answers. And it won't make a difference, a retiree could just hold the acc fund and sell units for income. A saver could buy the Inc fund and use the dividends to buy another fund, or leave as cash, whatever you want.

Yes I have the accumulation fund. The fund reinvests the dividend within the fund (presumably on my behalf) but I don't see it reflected in my account anywhere? So how does it benefit me? I guess I still don't understand how it works - if the fund reinvests the yield/dividend automatically then I should see that reflected somewhere (e.g. the NAV, or me receiving more units), no?  

/
You buy £1,000 of the acc fund.
I buy £1,000 of the Inc fund.
Fund uses our £2,000 to buy a little piece of every publicly traded company in the world.
Companies pay fund dividends.
Fund uses dividends to buy more peices of companies.
Say in year 1 prices of companies shares grows 10% for example. Also in year 1, our £1,000 peices of the fund each receive £25 of dividends in total.
The acc fund prices goes upto £1125
The Inc fund price goes upto £1100 and pays me £25.
The unit price of the acc fund is now a little higher to reflect the fact that it has already used the dividends to buy more shares.
Were both £125 richer. Only difference is I have £25 cash you have an extra £25 already automatically in your acc fund.

83705628

tcallaghan93 said:

bogleboogle said:

tcallaghan93 said:

bogleboogle said:

@tcallaghan93 thanks for your reply. 

on the "Distributions" page it says "Yield As at close 30 Jun 2020 1.87%". Basically, my question is: where do I see this reflected in my account? At first I thought this means that on 30 Jun 2020 each account gets 1.87% invested into new units (so someone with £10,000 in GAC would receive £187 in new units), but it doesn't look like that's the case, so how does it work? 

/
Happy to help, this took me a while to get my head around too.
I wish it paid out 1.87% a month 😍
Sorry about the CAPS, they're for emphasis I just cba with italics
You've bought, I think, the accumulation shares class of the fund. The FUND, not the platform automatically reinvests the dividends WITHIN THE FUND without you ever seeing them in your account.
You won't see this in your account.
1.87% is the ANNUAL rate, and it's the FUND's dividend. This particular fund has decided to distribute annually because it's easier than paying out the dividends when it receives them because then it would literally be paying out tiny amounts of money everyday. Apple dividends one day, Toyota the next, Nestle the next... It would be impossible to manage that.
1.87%  the last dividend the fund paid out divided by the fund's price on 30/6/20.
If you look at the income share class (https://www.vanguardinvestor.co.uk/investments/vanguard-ftse-global-all-cap-index-fund-gbp-inc/overview), look at the distribution amount of £2.443 and divide by the  price & performance NAV for 30/6/20 £128.32, the answer is 1.90%, exactly the same as on the distributions page.
The number for the accumulation fund, 1.87%, is always slightly different but this is just how that's worked out, it would never affect the actual return you get.
The GENERAL advice is if you're retired and you want the income, buy the income fund. If you're still saving up, buy the accumulation fund. But it's upto you you can do whatever you want, no right or wrong answers. And it won't make a difference, a retiree could just hold the acc fund and sell units for income. A saver could buy the Inc fund and use the dividends to buy another fund, or leave as cash, whatever you want.

Yes I have the accumulation fund. The fund reinvests the dividend within the fund (presumably on my behalf) but I don't see it reflected in my account anywhere? So how does it benefit me? I guess I still don't understand how it works - if the fund reinvests the yield/dividend automatically then I should see that reflected somewhere (e.g. the NAV, or me receiving more units), no?  

/
You buy £1,000 of the acc fund.
I buy £1,000 of the Inc fund.
Fund uses our £2,000 to buy a little piece of every publicly traded company in the world.
Companies pay fund dividends.
Fund uses dividends to buy more peices of companies.
Say in year 1 prices of companies shares grows 10% for example. Also in year 1, our £1,000 peices of the fund each receive £25 of dividends in total.
The acc fund prices goes upto £1125
The Inc fund price goes upto £1100 and pays me £25.
The unit price of the acc fund is now a little higher to reflect the fact that it has already used the dividends to buy more shares.
Were both £125 richer. Only difference is I have £25 cash you have an extra £25 already automatically in your acc fund.

/
If you compare the NAV of the acc/Inc versions of the fund you'll see that the acc version's Mac grows slightly faster than the Inc versions year on year. You don't receive more units in the acc fund, instead, the units become worth more. NB I think when the fund launched they set the unit price at £100 for both ACC and inc.
The difference is basically not a different investment it's just an instruction for the same investment "give me dividends!" or "re-invest my dividends!"
Imagine if you owned a share in Tesco and when they tried to pay you the dividend you said "oh no thanks that's ok guys, re-invest it on the business" and they used it to make the business more valuable like opening another shop.
That's kind of what you're doing with the acc fund. With the Inc fund you're saying "give me the cash and get back to work making do with the shops you already have."