Please can someone explain to me how the yield works on an accumulating fund? Sorry if it’s a stupid question I’m just trying to understand it all better.
For example, ‘Royal London Global Equity Select M Acc’ is an accumulating fund but also has a yield of 0.78%.
I’m not certain but maybe the 0.78 is what accumulates.
I don’t think it’s that. I think it’s that it pays out 0.78% of your total investment, in this case dividends are paid twice a year so I assume 0.78% twice a year, and the rest accumulates? But I might be wrong.
The linked fund is a Mutual Fund, which is a different type to an Exchange-Traded Fund.
You will only find ETFs on InvestEngine.
Mutuals predate tax-efficient vehicles like ISAs and SIPPs.
The tax treatment for dividends, interest and growth are different, so investors need to know how much of each they earned (outside of an ISA/SIPP), hence the requirement to publish the data, even though it is an accumulation fund.
Accumulating ETFs publish the same, but you have to look in the annual accounts.
For contrast, look at VWRP (an Acc ETF) on AJ Bell and you won’t see a dividend yield published.
In general, hold your investments in an ISA or SIPP if you have sufficient allowance, to avoid the tax obligations.
Thank you @nedjohn I appreciate you explaining it to me. So for my purposes, investing in a tax free ISA, the yield on an accumulating fund makes no difference to me, it will all stay in and accumulate?
If saving for the future, Acc ETFs held in an ISA make sense.
The focus is on Total Return, regardless whether coming from dividends, interest or intrinsic growth.