Money market income funds

GrumpyWithMoney

I am thinking of buying the Royal London Short Term Money Market Y Inc fund as it has a good yield of 5.25%. However, I notice the dividend is payed semi-annually (no idea when?). If I sell my fund before the dividend date or ex-dividend date will I still get the income? Also, if I do lose the income then presumably I would be better off buying into the accumulation fund as that accumulates on a daily basis?

aroominyork

This thread might be useful https://forums.moneysavingexpert.com/discussion/6498269/equalisation-for-funds-generating-interest/p1

dunstonh

However, I notice the dividend is payed semi-annually (no idea when?).

May & Nov is when they go XD with distributions a month later.

 If I sell my fund before the dividend date or ex-dividend date will I still get the income? 

The unit price reflects the income built up before it goes XD.   Once it goes XD, the unit price will drop back and the cycle starts all over again.     Or you could just go for the ACC units.

Also, if I do lose the income then presumably I would be better off buying into the accumulation fund as that accumulates on a daily basis?

Returns on INC and ACC are the same (assuming INC reinvested).  It makes no difference.

If you are in a GIA, you may prefer INC units.  Or if you are using the yield to supplement income, then INC units again.  If you are using it dor defensive assets but don't need the income then ACC will be fine.

Samuelsjourney

I use a sterling short term MM fund in a sipp. Its income based. Whilst interest rates are high im happy to take income and reinvest into my portfolio.