Dividends

ANGLICANPAT

Good evening folk. Probably another one of my naive questions , but still on the learning road.  Im  reading through the pre investing  ISA acc   blurb at  iweb and have come across info saying they only accept dividends as cash  -  this seems to imply that  some funds  give  units or shares instead ?    Is the latter common  , which would mean if you check and find  the div paying funds you already hold , or intend to hold  dont pay in cash ,  choosing iweb platform could be problematic  or am I misunderstanding ?

Thrugelmir

Some companies offer share alternatives to dividends (i.e cash).  Platforms hold shares under a block registration on a nominee basis. The company doesn't therefore know who actually directly owns the shares and is unable therefore to offer the share option. 

ANGLICANPAT

 Does that mean I need to be careful  as to whether iweb is suitable for me then if  I find the funds  I hold dont give  divs as cash?

AnotherJoe

I think you'll find almost zero companies offer shares instead of dividends

Thrugelmir

ANGLICANPAT said:

 Does that mean I need to be careful  as to whether iweb is suitable for me then if  I find the funds  I hold dont give  divs as cash?

With funds the accumulation versions simply reinvest internally.  With income funds you would receive a cash distribution , there'd be no option to automatically reinvest in addition units in the same fund. 

ANGLICANPAT

So Im likely to find  all or most of my funds I hold or choose later to hold  , will give divs in cash  and anything else would be the exception  . Thats good   its taken me long enough to work out that  iweb would suit me  the best , I dont fancy  having to re-decide on another platform  because of a div problem .  Thanks Joe and Thrugelmir   

ANGLICANPAT

Investment trusts  are they any different  for the liklihood of  dividends being in any form other than cash ?

Linton

ANGLICANPAT said:

Investment trusts  are they any different  for the liklihood of  dividends being in any form other than cash ?

No.

Thrugelmir

ANGLICANPAT said:

Investment trusts  are they any different  for the liklihood of  dividends being in any form other than cash ?

No. Investment Trusts are themselves just another form of listed company that are traded on the Stock Market.  Scottish Mortgage Trust, (for example),  is itself a constituent of the FTSE100. 

MaxiRobriguez

ANGLICANPAT said:

Good evening folk. Probably another one of my naive questions , but still on the learning road.  Im  reading through the pre investing  ISA acc   blurb at  iweb and have come across info saying they only accept dividends as cash  -  this seems to imply that  some funds  give  units or shares instead ?    Is the latter common  , which would mean if you check and find  the div paying funds you already hold , or intend to hold  dont pay in cash ,  choosing iweb platform could be problematic  or am I misunderstanding ?

The funds you purchase are almost certainly to be either income or accumulation funds.

Accumulation funds simply means any dividends/payouts from the underlying assets are maintained in the fund, rather than given to you. 

Income funds means any dividends/payouts from the underlying assets are paid to you.

The result between the two is that accumulation funds will have better % gains on a chart, the difference roughly equivalent to the money that wasn't paid to you that was in the income fund. 

What iWeb is saying here is that if you buy an income fund, they can only give you dividends/payouts if they are cash. If the fund pays out with something else - shares, wine, thai brides.... then iWeb can't deal with that.

LHW99

If you hold shares directly (used to be with an actual share certificate, but probably now on the share register under your own name) you can / could sometimes choose to have the company issue you with extra shares, purchased using part or all of the cash dividend. AFAIK if you hold shares through a platform, none of them would offer that, as the shares are not individually registered to you personally, just that your bit of the platform's block of that share is recorded as your property.

Iweb may just be trying to make this clear.