Calculating dividends
A dividend is a payment made by a company to its shareholders, typically out of its profits or reserves. Dividends are a way for companies to distribute some of their earnings to shareholders and are typically paid in cash or additional shares of the company’s stock. In our case, the ETFs within our portfolios are themselves composed of stocks that pay dividends.
Accumulation and income ETFs are both types of ETFs, which are investment vehicles that track a basket of underlying assets, such as stocks or bonds. The main difference between accumulation and income ETFs is the way that they distribute their earnings.
Accumulation ETFs, also known as capitalization-weighted ETFs, do not pay dividends to investors. Instead, they accumulate the dividends received from the underlying assets and reinvest them back into the fund. This means that the value of the fund’s shares will increase over time as the dividends are reinvested and the fund’...
