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another fund question

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looking at this for a drip feed say £50 per month to start with

blackrock meryl lynch investment managers gold and general income or accumulation

1stly wahats the diffrence obviously income or accumulation but why is the price different? , i am happy with accumulation as i will only be investing a min amount each month.

secondly i have put 1k into the vantage high interst isa with HL while i decide where to put it can i in the meantime pay £50 p/m into the blackrock fund as it says on the website the minimum amount is £1000 ?

thanks
i am new to this investing business and value peoples experience/opinions as a learning tool - thank you

Comments

  • Graeme7777
    Graeme7777 Posts: 255 Forumite
    Part of the Furniture 100 Posts Combo Breaker
    Hi,

    The distribution unit pays out to the investor any income that the management company chooses to distribute, while this income is reinvested automatically with the accumulation unit and is not paid out to the investor.
  • westy69
    westy69 Posts: 161 Forumite
    thanks although sorry i dont understand, are you saying the income and accumultaion funds are essentially the same? and what is the distribution unit? :confused: and why is there a unit price difference between the 2 i/c and accu? on some funds i have noticed the price difference can be massive
    i am new to this investing business and value peoples experience/opinions as a learning tool - thank you
  • Graeme7777
    Graeme7777 Posts: 255 Forumite
    Part of the Furniture 100 Posts Combo Breaker
    Yes, many funds offer an investor the choice between investing in an acc or inc unit of a particular fund, depending on whether you want the income paid out to you or reinvested on your behalf.

    One of the reasons that the acc and inc prices can differ is because the value of the income unit, and hence its price, has been reduced by the amount of income paid out over time. In contrast, no income has been paid out of the acc unit.

    Hope this is more clear.

    Cheers
  • westy69
    westy69 Posts: 161 Forumite
    just re-read that and i assume by distribution you mean the income fund? :o

    i have also found out from H&L i can pay a min amount of £100 d/d in each month split over 2 funds if i wish

    thanks

    but still dont understand why the unit prices are so different on the income compared to the accumulation.....
    i am new to this investing business and value peoples experience/opinions as a learning tool - thank you
  • westy69
    westy69 Posts: 161 Forumite
    cheers :beer: posted my last reply before i saw yours all a lot clearer now (for now anyway)
    i am new to this investing business and value peoples experience/opinions as a learning tool - thank you
  • Graeme7777
    Graeme7777 Posts: 255 Forumite
    Part of the Furniture 100 Posts Combo Breaker
    Also, the acc and inc units may not have been launched at the same time. If one is significantly older, its price is likely to be very different to the other unit.
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