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Unlocking hidden treasure in accumulation funds

The art of passive investing is famously so boring, some practitioners gamble with a slice of their assets in order to stop themselves running amok in the sweetie shop. They seek kicks like accountants who go planking on police cars at the weekends.

It’s a risky business with a high chance of coming a cropper.

What we need are signs of progress that prove we’re advancing gloriously into a beautiful future. Eventually. And that’s not always easy to get from a passive portfolio in volatile times.

It’s especially tough when all your holdings are in accumulation funds that are seemingly going nowhere.

Discover the dividend payments of your accumulation funds

Fattening up your funds

Accumulation funds automatically reinvest dividends for you. The fund price bumps up as the dividends are ingested but it often seems like an inconsequential burp when prices are in the red.

Contrast that with the feedback you get from distributing funds, which pay out dividend cash straight into your brokerage account. Every deposit is a little win, a tiny little jackpot dispensed by the financial fruit machine.

Even when the going is rough, those pay outs are the positive feedback I need to remind me that owning equity is not about whether today’s share price brings victory or defeat. I have a stake in productive businesses that will keep handing me back a share of their earnings for years to come.

And if I keep reinvesting those dividends, then the compounding effect of owning those money pumps will have a dramatic impact on my returns over the long term.

But that positive feedback is easily missed with accumulation funds. Most do not directly inform investors about dividend performance, and passive investors are not the type to be monitoring fund prices on a daily basis to catch that dividend day swell.

How to find dividend distributions for accumulation funds

If you’ve been missing out, then take a look at the secret store of money that accumulation funds have been stashing away on your behalf.

To uncover the dividend distributions of your accumulation fund:

  • Go to Trustnet and search for your fund using the drop down menus on the home page.
  • Most index funds will be in the Unit Trusts & OEICs section.
  • Use the Offshore Fund tab to find foreign domiciled funds (e.g. much of the Vanguard range).
  • Click on the dividend tab from the fund overview.
  • Make sure you click on the right fund as Trustnet tends to bundle lots of similarly named fund variants in the same place.
  • Multiply the dividend amount by the number of units / shares you held in the fund on the payment date to discover how much you’ve earned in pounds and pence. (Don’t include any units you bought during the ex dividend period.)
  • Enjoy closet kicks from the money flowing from Global Capitalism plc to You plc.
  • Possibly plot the gains on some kind of spreadsheet. (It depends on how much you want to stretch the joy).

Trustnet doesn’t always come up trumps, so here’s an alternative method:

  • Put your fund manager’s name (e.g. Dimensional) in the Company Name field.
  • Set the All Categories field to Dividends.
  • Change the Time Span field to something more generous like six months.
  • Click the Search box if nothing happens automatically.
  • A list of dividend payment announcements should come up.
  • Click on the Dividend Payments link in the right-hand column.
  • The dividend announcement should pop up. Read it and you’ll hopefully find your fund and its dividend result somewhere within.

Take it steady,

The Accumulator

{ 49 comments… add one }
  • 1 webnibbler February 14, 2012, 1:21 pm

    Keeping a small amount aside to ‘gamble’ with as a distraction really works for me. Thanks for that tip. No doubt without it I would be taking my passive portfolio apart to see how it works every few months. Now, how are those dividends doing …

  • 2 J Cox February 14, 2012, 2:46 pm

    Can this be applied to accumulating ETFs?

    For example db X-trackers FTSE ALL-WORLD EX UK ETF (XWXU)?


  • 3 gadgetmind February 14, 2012, 2:51 pm

    I tend to have 5% of each pot set aside for what I euphemistically call “themes”.

    Monevator is responsible for at least some of these “themes”, but only those that have performed well, of course!

  • 4 The Investor February 14, 2012, 4:00 pm

    @Gadgetmind – “Responsible”… I suspect you have your tongue in your cheek, and I’m very glad you’ve find the site useful, but I best take the opportunity to remind everyone that we are *not* responsible for anyone’s investments. All actions at your own risk. Here’s the disclaimer.

    Sorry if that sounds a bit heavy, but I do need readers to understand. Cheers! 🙂

  • 5 gadgetmind February 14, 2012, 4:04 pm

    Yes, tongue firmly in cheek!

    (And even that LLPC is looking like it will come good in May. 🙂

  • 6 Lupulco February 14, 2012, 5:00 pm

    A couple of years ago i got fed up with the abysmal %rates paid by some institutions and the way the con the savers, give you 1-1.5% and lend it out at 6-8% . plus when NSI scrapped the Index linked Bonds. I decided to have a punt myself on the FTSE.

    I tried using one of those dummy accounts, then after 4 month i started to use real money as ISA’s matured building up slowly to the value of a modest new car

    I still keep ISA’s, and Premium Bonds for safety, but used the above sum as a sort of hobby fund. My aims were simple, try to beat, the ISA rate, the RPI +1% and even those pinstriped suits who market trackers.

    After 18 months i have achieved all 3 aims, plus have found myself an interesting hobby along the way.

  • 7 JC February 14, 2012, 8:49 pm

    Great post although having just looked through the index funds I’ve invested in I see that they pay dividends just once per year (mainly HSBC Index funds) so this hasn’t kept me distracted for long.
    City of London Investment Trust pays 4 times a year so that one is slightly more exciting!

  • 8 Jonny February 15, 2012, 9:55 pm

    Really useful article (and something I’ve often wondered about).

    Always nice to read about someone other than myself who can get joy from a spreadsheet!

  • 9 The Accumulator February 15, 2012, 10:35 pm

    @ J Cox – Trustnet have a separate tab for ETFs but there’s no divi info for XWXU sadly.

    @ Gadgetmind – I’ve often thought of doing the same thing. A small sum in a timber ETF, another in farmland, and so on. Resisted the urge so far.

    @ JC – You’ll always look forward to July though.

    @ Jonny – Good to know I’m not alone!

  • 10 Ash February 22, 2012, 2:27 pm

    I use Trustnet to track all my investments, but own shares through the Motley Fool sharebuilder platform. When I look on the Motley Fool valuation page it shows the value of my investments ignoring dividends. Buy updating trustnet with the quantity of shares I own (which rises with each dividend) I can compare the total value of my investments with and without dividends.

    For example my Vodafone shares I bought a couple of years ago are up £52 on Motley Fool and £97 on Trustnet, so my dividends have contributed £45, happy days.

  • 11 Donny May 16, 2012, 3:41 pm

    I am new to this, so excuse what may seem a simple question regarding ex dividend. I was about to buy some HSBC American Index Acc units today and discovered they are now “ex-dividend” as of today (16 May 2012). I intend to invest for the long term, so my understanding is that the growth comes from the reinvestment of the dividend other than the unit price,right? Therefore, is there any point in buying these now or should I wait to wait until later. Am I missing something …?

  • 12 gadgetmind May 16, 2012, 6:20 pm

    @Donny – buying cum or ex dividend makes no difference to long term total return. If you go for income units outside an ISA/pension wrapper, it does let you decide whether to have dividend income or capital gain, but there is no difference for accumulation units. The dividend is paid out and then buys more equities within the fund, so the price remains the same.

  • 13 The Accumulator May 16, 2012, 9:33 pm

    @ Donny – I wouldn’t delay. The ex dividend mechanism stops Jonny-come-lately’s scooping up a share of dividends they haven’t properly earned. The price will have dropped slightly when the fund went ex-divi, so you’re not losing out. If you’re in for the long term you’ll get plenty of dividends in the future and may benefit from market uplift in the meantime.

  • 14 gadgetmind May 17, 2012, 6:47 am

    Haven’t properly earned? Equities trade “dirty” some when you buy “cum dividend” you pay out in capital for the dividend that you’re about to receive. Other than turning capital into dividend income (or vice versa) it’s all neutral.

  • 15 Moschops October 19, 2012, 8:49 am

    Nice artitcle thanks, exactly what i was looking for.

  • 16 Emanon August 2, 2013, 5:36 pm

    I’m new to personal investing and to this site – of which i’ve benefited a great deal from today by reading, and reading and reading and then i read some more. Now my head hurts so this is my last read, maybe….

    I recently invested in a fund (FUNDSMITH), i’ve only made one large contribution. The fund is wrapped up in an ISA with TD direct. The basis of passive investment for me is the compounding….

    How does compounding work if you are taking the money out of the fund and in your pocket. Perhaps i’m being naive but i’m struggling to compute how this method of interest on interest works if you are taking back what will work towards the compound effect?


  • 17 The Investor August 2, 2013, 11:28 pm

    @Emanon — The return you get from a fund has two components — the capital return (how much it goes up in value) and the income (which is what it pays out to you, which you’re calling ‘interest’ here but is not quite the same).

    Let’s take a step back and consider an individual (and made-up!) company. In a year it makes say £1million profit. It might decide to pay out £500,000 as a dividend to its owners (the shareholders) and reinvest the other £500,000 in a new area of business.

    Over time, the new investments it makes in its business should generate a higher profit than £1million. So the business becomes more valuable, and eventually its share price will go up. If you own its shares, you’ll benefit from this rising share price, as well as the share of profits you’re paid every year.

    An equity fund like Fundsmith holds a bunch of such companies. So over time, if it gets its picks right you’ll benefit from the rising value of those companies, plus the income they pay out, minus any fees.

    The compounding of company values happens automatically — it’s exactly the same as house prices going up! 🙂

    To get the benefit of compounding the income, you have to not withdraw the money but rather reinvest it back into the fund. It can’t grow in your pocket — you’re quite right on that!

    Investing is at its most lucrative when you reinvest the dividend/fund income back into companies that are also seeing their value rise. A double whammy. 🙂

  • 18 Emanon August 5, 2013, 8:37 pm

    So as i understand it; I invest into the fund, the fund then invests into it’s individual stock selection (in this case a equities only fund). They are paid from their successful stock picks (yay), they then re-invest the dividends paid to them from their investments either into the same stock or another choice. The overal capital gain from their investments are fed back to the people who participate in the fund, they in turn either take the dividend or re-invest into the fund to capitalise on the compound effect….so far so good?

    But, assuming the fund share goes up in value, am i then starting to price myself out of the fund off the back of fueling its success. i.e whereas now i get more for my buck, for that same buck in the future that same buck could get me less. Correct?

    Aside from this can you please help clarify the logistics of the internal working of a fund;

    – how often is the compound interest calculated within the fund.
    (my fund is up since i started investing but i won’t have received any of that interest?)

    – how does one withdraw from the fund when that time comes (or if you want to get out of the fund early, perhaps some clues as to early exit signals)?
    (is it simply a case of selling off your shares? Is their a smart exit strategy to maintain the compound interest growth, or at least try to buffer it by taking out a certain percentage below the funds growth?)

    sorry if these questions are quite granular, for me personally i think it’s vital to know the finite functionality of these funds as it’s hard enough searching through the 100’s of different funds out there.


  • 19 The Accumulator August 10, 2013, 9:43 pm

    @ Eamon – Rebalancing is your best bet to take advantage of soaring assets. That will transfer gains to cheaper asset classes that are likely to outperform in the future.

  • 20 Lee January 7, 2014, 5:10 am

    Unfortunately there was no information on any of the funds I hold. I tend to check them daily, but still have no idea when my accumulation fund dividends are reinvested.

    There is no increase in the number of units, so I guess the dividend is lowering or increasing the average cost per unit dependent upon the time of the dividend reinvestment. I can’t see any changes here either over time.

    Though I appreciate the notion of passive, and that any information on dividend reinvestment could perhaps increase the cost of funds, I do wish there was a bit more transparency on this.

  • 21 The Accumulator January 7, 2014, 2:09 pm

    Hi Lee,

    I totally agree with you about the transparency. Try searching on Investegate or Citywire or write to the fund manager’s directly for the info.

  • 22 The Accumulator January 25, 2014, 5:51 pm

    Post now updated with the Investegate method.

  • 23 The Rhino November 11, 2015, 11:46 am

    “Multiply the dividend amount by the number of units / shares you held in the fund on the payment date to discover how much you’ve earned in pounds and pence. (Don’t include any units you bought during the ex dividend period.)”

    If you sold units during the ex dividend period, then you should add those units on to the number of units held on the payment date before multiplying

    A simpler way of describing it may be to say just multiply the no. of units held on the ex dividend date (not the payment date) by the dividend amount to work out the dividends you’ve been paid. The actual payment date is only of use to know in which tax years tax return you have to declare the income.

    Or have I missed something?

  • 24 The Accumulator November 11, 2015, 9:17 pm

    Hi Rhino,
    It’s been so long since I wrote this, I can’t find my original research. Have you come across something that says acc funds work this way or are you making a deduction? Would be good to know your line of reasoning.

  • 25 The Rhino November 12, 2015, 2:34 pm

    All I’m saying is that for any acc type fund, multiplying the no. of units held on the *payment date* by the dividend amount, but not including any units bought in the ex-dividend period is the same as saying multiply the no. of units held on the *ex-dividend date* by the dividend amount.

    I am assuming the inverse issue, i.e. you sell some units during the ex-dividend period, means you still receive dividends on the *payment date* equal to the units held on the *ex-dividend date* held multiplied by the dividend amount. That is only an assumption, but it would seem unfair if it weren’t the case as its just the mirror of the case where you buy during the ex-dividend period.

    Finally, I have noticed that the ex-dividend date and the payment date can span tax years, hence my comment that the no. of units held on the ex-dividend date is what is used to compute the dividend paid, but when deciding which tax return you declare that dividend in, you have to use the payment date

    I hope that makes sense, although writing it, I think I may still have struggled to make my points any clearer.

  • 26 The Rhino November 12, 2015, 2:47 pm

    the old ad campaign slogan – ‘tax doesn’t have to be taxing’ was never coined by a creative that ever had to file a return, I know that much for sure.

    I feel it can get easier with practice, but you have to suffer a good few times first beforehand

  • 27 The Accumulator November 12, 2015, 6:59 pm

    Yes, I think I erred on the side of you wouldn’t get the payment if you sold units during ex-divi period. Value would have dropped after ex-divi date, you sell, fund price bumps up slightly on payment date, but no-ones keeping a record of when you sold your units, so you lose out.

  • 28 theRhino November 12, 2015, 11:08 pm

    Well its a funny old world..

    Come to think of it, I think i did sell a bunch of stuff in the ex-dividend period this year

    curse you god for making it this way..

    I wonder if it cost me much?

  • 29 The Rhino November 16, 2015, 4:41 pm

    This thread is pertinent:


    TL;DR – It prob doesn’t matter when you sell a unit trust – you won’t lose out.

    What this has reminded me of though is making sure you factor in divis when trying to calculate CTG, so you don’t end up paying income tax *and* CGT potentially.

    Holding acc units outside of a tax-free wrapper really is an utter nightmare

  • 30 The Accumulator November 17, 2015, 8:04 pm

    Thanks for following this up Rhino. I think I’ll mail some fund providers and see if they can shed more light on it. Should only take a couple of months to get a reply.

    If it works as Alan thinks it does it would be impossible to know how much dividend you’ve accumulated. And acc funds still have ex divi and payment dates. I suspect we haven’t quite got to the bottom of this yet, but let’s try!

  • 31 The Rhino November 18, 2015, 11:15 am

    I had a similar feeling, i.e remaining a little unconvinced

    Last night I did find a report from HL (who I was with at the time) that included a tax certificate for 2014-15. Thankfully this had all the dividend details in it, so I’ll use that now for the old return.

    I’m hoping IWEB will provide similar data for next year.

    One thing I noticed was that computing the dividend paid as per this article resulted in a no. roughly double what HL reported. So if I had used that value I would be on the hook for approx twice as much tax – which is a bad thing.

    In that particular year, I didn’t sell anything in the ex divi period (I did that in 2015-16) so it can’t be due to that. I did only buy the units in Oct 2013 though, i.e. roughly half way through the tax year, so maybe it makes sense I only received about half what your article calculation produced? The fund in question went ex divi on the 01/04 with a payment date of 31/05 – so spans the tax year.

    I think in future, unless I can bottom this out, I might judiciously wait until the start of june before selling anything again. Just to be on the safe side.

  • 32 The Accumulator November 22, 2015, 2:35 pm

    Interesting. I’ve just got a dividend payment notice from YouInvest for BlackRock Glb Property Tracker D – Acc.

    The payment tallied exactly with the methodology described in the article and using the dividend figure reported by Trustnet.

    This payment had a bit of everything: units held before the distribution period, units bought during the distribution period (covered by an equalisation amount that accounts for a purchase price that contained income) and units bought during the ex-divi period that paid out nothing.

    Here’s some notes I’ve collected on equalisation:

    Any units purchased prior to the reporting period, are classified as group 1 units. These units do not have any equalisation element.

    If you have purchased units during the reporting period, these would be classified as group 2 units. As the purchase price during the reporting period would contain an element of income, a capital distribution payment (Equalisation) is made to clients to effectively refund for the income element in the original purchase price.

    (iii) Equalisation is accrued income included in the price of units/shares (Group 2 units/shares) purchased during the period. It should be deducted from the cost of units/shares for capital gains tax purposes and is not subject to income tax. (iv) Group 2 units/shares are the units/shares purchased during the distribution period and which were held at close of business on the period end date. They may constitute all or part of your total holding. Group 1 units/shares are those purchased prior to the distribution period. (v) A unitholder/shareholder within the charge to UK corporation tax receives the dividend distribution excluding any equalisation as unfranked income to the extent that the gross income less tax from which the dividend distribution is made is not franked investment income. The unfranked part of the distribution is received as an annual payment from which income tax at the lower rate has been deducted. The maximum amount of income tax which may be reclaimed from HM Revenue & Customs is the corporate unitholder’s/shareholder’s portion of the fund’s net liability to corporation tax in respect of the gross income.

  • 33 The Rhino November 25, 2015, 10:34 am

    wow! worth repeating at this point that ‘tax doesn’t have to be taxing’ i feel. well possibly in some parallel universe.

    good investigative work TA

  • 34 Cowboy September 27, 2016, 9:14 am

    I tend to take the lazy mans approach to this issue myself. All funds in ISA’s and pensions are accumulation as I don’t have to keep a record of dividends, and all funds outside these wrappers are income. This makes life a good deal less painful when doing the yearly needful 🙂

  • 35 The Rhino September 27, 2016, 9:51 am

    @cowboy – that is sensible, however my brokers (iweb and hl) both do the work for me when they produce my tax certificates each year. I just have to cut and paste into the HMRC website. I do have to take it on trust that they are right. I have never yet been able to compute the same no.s that they do (TA is a miracle worker to have achieved this feat) – but thankfully theres are always smaller so who am i to argue.

  • 36 PinchThePennies September 27, 2016, 1:45 pm

    My S&S ISA and SIPP are with AJ Bell which provide a transaction history for each account. Any Accumulation Distribution (Dividends) my one accumulating fund “pays out” is listed there and has its own reference which is hyperlinked to a document with all the details (number of shares, dividend amount (AJB calls it Group 1 payrate and Group 2 payrate), ex-dividend date and payment date etc.). The document could be printed out if required. I guess that AJB also does Tax Statements howecer I do not require one of these at the moment.

    I also have bookmarked a link to the Income history page of the fund I am holding and work out the “dividend” myself in advance just to be sure. The amounts have all been correct from AJB but they have been slacking in crediting a dividend of this fund on time this year.

    Regards, Pinch

  • 37 Planting Acorns September 27, 2016, 5:00 pm

    With charles stanley direct go to ‘my dashboard’ then ‘stock movements’

    … Easy !

  • 38 david September 27, 2016, 5:34 pm

    One thing I do is compare the Inc and Acc versions of the fund on the same chart at Google Finance. Charles Stanley seems to include dividends on the charts even for the Inc versions, but with G Finance you can really see the difference the divs make.

  • 39 Maximus September 27, 2016, 9:03 pm

    Great article Accumulator and interesting comments too.
    I have several ‘acc’ funds and want to gradually release some cash from them over the next few years.
    I wonder if anyone has any thoughts about whether it is best to do this by selling units in these funds, or by selling and re-purchasing them in their ‘distribution’ versions and taking their natural yield..?

  • 40 Tim September 27, 2016, 10:53 pm

    Good stuff. While I’ve enjoyed the hassle-free reinvestment which comes with buying ACC units for a few decades now, over the last year or so I’ve found myself selling off the big holdings with any significant yield and reinvesting them in their INC equivalents. (Unfortunately my platform isn’t one of the few I’ve heard rumoured will do straight unit-type switches; but in the end I got lucky on the out-of-the-market timing. This is all SIPP&ISA stuff so no CGT events to worry about). Reason is, I want to use the dividend income stream to help rebalance the portfolio towards other assets rather than keep reinvesting in more of the same.

    @Maximus: I figured a one off dealing cost (well, two, one to sell, one to re-buy) per holding was better than sticking with the ACC units and paying for yet another sale every time I wanted to convert some of the internally accumulated dividends’ value to cash. (But any exposure to CGT might have changed my approach.) Note that this isn’t a fast way of “releasing some cash”: if asset prices go nowhere and with no other injection of funds, a 100% equity portfolio yielding 4% (optimistic?!) and accumulating that as cash (or 0% bonds) would still be 83% equities after 5 years and 71% after 10 years.

  • 41 Maximus September 28, 2016, 11:34 am

    @Tim: Thanks for your thoughts. ‘Acc’ vs ‘Inc’ units seems a finely balanced contest for getting an ‘income’ in practice.
    In my case I’d only be liberating cash every few months and dealing costs would be free; there are no CGT issues. Plus I could choose when to take the cash and allow dividends to be naturally reinvested within the funds until then…

  • 42 Jon September 28, 2016, 3:33 pm

    TA, I will start to live off my dividends this month. 46 dividend machines generating income. Brokerage accounts have been re-programmed to transfer dividends directly to my checking account. Cant wait for first dividend to land in my checking account, will be amazing feeling after accumulating all these years. US broker has given me an ATM debit card and I have used that multiple times already to withdraw “real” cash.
    Regards, Jon

  • 43 Paul September 28, 2016, 5:17 pm

    Thanks for the article. I just checked my main holding – Vanguard Lifestrategy 80 Acc and it shows a dividend yield of 1.65% which is lower than i expected. Also they only seem to be paid annually which i assume would disadvantage compounding from more frequent re-investment. Growth has been good though, so can’t complain.

  • 44 Tyro September 28, 2016, 8:30 pm

    @Maximus: “I wonder if anyone has any thoughts about whether it is best to do this by selling units in these funds, or by selling and re-purchasing them in their ‘distribution’ versions and taking their natural yield..?”

    Or you could just look up the ‘natural yield’ of the Inc version and then sell whatever amount of the Acc version that’ll provide the equivalent payment into your account.

  • 45 The Accumulator September 29, 2016, 5:40 pm

    @ Maximus – psychologically a lot of people seem to find it easier to take income than to sell acc units. Particularly in a down market. Tyro’s idea is great though and seems to offer the best of both.

    @ Jon – Great to hear. Can just imagine the smile on your face. Love your description of the dividend machines and am looking forward to the day I join you.

  • 46 Maximus September 29, 2016, 10:05 pm

    @Tyro & @The Accumulator: Thanks for your help guys. I think I’ll run with selling ‘acc’ units. I’ve set up a 2 year cash buffer fund so ‘down markets’ shouldn’t be a problem.

  • 47 Snuff January 8, 2018, 5:17 pm

    Hi Investor, Accumulator,

    I’m hoping you could help me with a query I’ve got regarding accumulation units – since September 2016 I’ve been drip feeding a small amount of cash into an index linked fund with accumulation units on a monthly basis and I’ve recently noticed that the number of units I currently hold exactly matched the number of units I’ve directly purchased. I was under the impression that accumulation funds would reinvest the dividends paid out by the fund into purchasing more units, which would compound the return over time as more units = more dividends = more units and so on. How does compounding work if the dividend merely pumps up the value of each unit I hold rather than increasing the number of units held?

    I assume I’m missing something so any sage guidance would be appreciated!

  • 48 The Investor January 8, 2018, 7:31 pm

    @Snuff — Hi! Accumulation (Acc) units do reinvest the dividends. This is reflected in a rising unit price though, not in owning more units. If you look at a fund that has otherwise identical Acc and Income (Inc) share classes, you’ll see this reflected in their unit prices. The Acc unit price will be higher.

    The compounding happens — it happens in the price of the unit. 🙂

    See this article:


  • 49 Snuff January 18, 2018, 12:28 pm

    @Investor, thanks for the reply. I think I’ve got the gist of it now, although the more I think about it the more I confuse myself so I’ll just take your word for it and keep on trucking 🙂

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