Converting accumulation shares to income shares in the same fund

melbury

I have had some M&G shares for years which have recently been switched to a fund called M&G European Sustain Paris Aligned Fund (Sterling Class A Accumulation Shares).

As I have now reached an age where a bit of income would be preferable to capital growth, I thought it might be a good idea to convert them to income shares.

However, I am a bit confused as having just checked, the accumulation share price is currently 537.80, but I can't find a price for Sterling Class A Income Shares.   So would the share price just be the same for both?

I am a bit loathe to switch if there is a big difference, in which case it may be better to just sell them and invest in another fund altogether.

NedS

The share price will not be the same, as the price of the accumulation units will rise faster as the dividends are being reinvested.

To switch, you would need to sell your current holding and reinvest the cash into the income units.

melbury

NedS said:

The share price will not be the same, as the price of the accumulation units will rise faster as the dividends are being reinvested.

To switch, you would need to sell your current holding and reinvest the cash into the income units.

When I asked M&G via email, they said I could just fill in a form to convert them which they are going to send in the post.  I just can't see a share price for the income shares anywhere.

eskbanker

melbury said:

However, I am a bit confused as having just checked, the accumulation share price is currently 537.80, but I can't find a price for Sterling Class A Income Shares.   So would the share price just be the same for both?

I am a bit loathe to switch if there is a big difference, in which case it may be better to just sell them and invest in another fund altogether.

https://www.mandg.com/investments/private-investor/en-ch/funds/mg-european-sustain-paris-aligned-fund/gb0030927700 has the latest price of the inc equivalent as 239.22, but don't be put off by the variance, acc and inc prices always diverge, as they inherently must (with the former increasing value by reinvesting).

Thrugelmir

Is this the fund? 

https://www.mandg.com/investments/private-investor/en-ch/funds/mg-european-sustain-paris-aligned-fund/gb00b6t93l12

melbury

Thrugelmir said:

Is this the fund? 

https://www.mandg.com/investments/private-investor/en-ch/funds/mg-european-sustain-paris-aligned-fund/gb00b6t93l12

I don't think so, I think it is the one mentioned in the previous post.

melbury

eskbanker said:

melbury said:

However, I am a bit confused as having just checked, the accumulation share price is currently 537.80, but I can't find a price for Sterling Class A Income Shares.   So would the share price just be the same for both?

I am a bit loathe to switch if there is a big difference, in which case it may be better to just sell them and invest in another fund altogether.

https://www.mandg.com/investments/private-investor/en-ch/funds/mg-european-sustain-paris-aligned-fund/gb0030927700 has the latest price of the inc equivalent as 239.22, but don't be put off by the variance, acc and inc prices always diverge, as they inherently must (with the former increasing value by reinvesting).

So presumably I would end up with a lot more income shares as the price of them is so much lower than the accumulation shares and hopefully they pay a decent dividend.

Bravepants

melbury said:

eskbanker said:

melbury said:

However, I am a bit confused as having just checked, the accumulation share price is currently 537.80, but I can't find a price for Sterling Class A Income Shares.   So would the share price just be the same for both?

I am a bit loathe to switch if there is a big difference, in which case it may be better to just sell them and invest in another fund altogether.

https://www.mandg.com/investments/private-investor/en-ch/funds/mg-european-sustain-paris-aligned-fund/gb0030927700 has the latest price of the inc equivalent as 239.22, but don't be put off by the variance, acc and inc prices always diverge, as they inherently must (with the former increasing value by reinvesting).

So presumably I would end up with a lot more income shares as the price of them is so much lower than the accumulation shares and hopefully they pay a decent dividend.

You should be able to see the historical yield for the shares, which would give you an indication of the likely yield at the moment, rather than hoping.

Thrugelmir

Upon reinvesting into income units. You will initially own the same holdings as the accum fund. 

melbury

Thrugelmir said:

Upon reinvesting into income units. You will initially own the same holdings as the accum fund. 

Oh that doesn't sound too good as the income shares are less than half the price!  

Have just looked and the yield is 1.7%.

ColdIron

The unit price makes no difference, the total value will be the same. In effect you will be selling 10 pints of 'beer' at £1 per pint and buying 20 half pints at 50p

What Thrugelmir meant was that the underlying holdings are the same