Part 5/7:
Understanding Fund Variants: Distributing vs. Accumulating
As if the complexities of index funds aren't challenging enough, it's important to note that index funds often come in two varieties: distributing and accumulating.
Distributing funds (denoted by "dist") pay out dividends directly to you as cash. In contrast, accumulating funds ("acc") reinvest dividends back into the fund automatically, saving you from manual reinvestment tasks.
For long-term investors who seek growth, opting for accumulating funds is generally advisable, as they increase your investment’s compounding potential and eliminate idle cash in your account.