Buying Accumulation and Income units of same fund?

[anonymous-user]

The initial message was deleted from this topic on 23 March 2021 at 09:39

[Jockman]

I focus only on acc funds - if a good fund is only available as an inc can you just ask for the divi to be reinvested

[marsred]

The important thing is not the unit type but the fund's objective. Whether or not you opt for income or accumulation units in any given fund makes no difference at all to the objective of the fund they are in.

Income units in the Woodford fund will get you exactly the same thing as accumulation units, the only difference being what happens to the income generated for you.

If a fund generates income and you want to take that income you buy income units. If you don't need the income but want it rolled up in the value of the fund (and therefore the price per unit) then buy accumulation units. If you don't need to take the income but the fund doesn't have accumulation units, ask for income to be reinvested. It all leads to the same end result.

The Woodford fund offers inc and acc units, so take your pick depending on your prefered option for the income.

[Mattt]

However reinvesting income into the fund results in fees, whereas this wouldn't happen with ACC - I assume?

[marsred]

Depends on the provider or platform, most providers won't charge for reinvesting income. Reinvesting dividends from equities will usually cost you, but that's different. One to check though. Accumulation units are always the better more efficient option if available.