Xtrackers S&P 500

I noticed in my portfolio that InvestEngine use the Xtrackers S&P 500, however, I also noticed that this does not pay dividends. What would be the reason for choosing a fund like this? It would be nice to know we get some dividends back to balance any losses.

Regarding why they chose a non-distributing ETF: I assume you’re referring to one of the growth funds managed by InvestEngine? The priority of growth funds (as opposed to income funds) is investing all the cash available, instead of distributing it as dividends. For an ETF like Xtrackers S&P 500, dividends are still paid and received by the ETF from the underlying holdings; they’re just kept inside the fund and reinvested automatically. This is in line with the goal of a growth fund.

There may be other reasons they choose the Xtrackers fund in particular – it’s GBP hedged, for example. Or InvestEngine has worked out some arrangement with DWS or market makers. Those are for InvestEngine staff to answer.

It does take dividends but it’s an accumulating fund. This means that all dividends are automatically re-invested without you seeing them. A distributing fund (such as VUSA) pays out dividends.

If you compare the return of say VUAG (Accumulation) and VUSA (distribution) you’ll see that VUAG narrowly outperforms VUSA in total returns as the dividends are re-invested. So they are included, it’s just you don’t see them as such :slight_smile:

Thanks for the explanation, it makes sense now. All we need now is for America to sort itself out and the investment world will be a happier place to be (or at least the S&P 500 will) :stuck_out_tongue: