How does this consumer discretionary fund reinvest its dividends and grow?

ColdIron

isayhello said:

Hoenir said:

Net income will be reinvested. Neither of the two largest holdings Amazon and Tesla which account for around 47% of the portfolio pay a dividend. Generally the larger US stocks are low yielding. 

If they are not paying much in dividends, has the funds performance done well e.g. in 2020 just because the companies it holds did well and made big profits?

US companies tend to pay lower dividends as the tax treatment is not as favourable as it is here. They reward their investors by using their excess profits to reinvest in the business or even share buybacks, both increase the share price

I thought the dividends usually have a big effect on the price.

Dividends can be useful for income but if you don't need it you should focus on total return

LHW99

Dividends can be useful for income but if you don't need it you should focus on total return

Although if held outside an ISA / SIPP, accumulation funds are a bit more involved for tax accounting

masonic

LHW99 said:

Dividends can be useful for income but if you don't need it you should focus on total return

Although if held outside an ISA / SIPP, accumulation funds are a bit more involved for tax accounting

In my view it is worth holding distributing funds that distribute all of the income in this case, and reinvest it yourself providing you can do so without incurring additional trading fees.