Author Topic: Are reinvested dividends included in acc funds price  (Read 1395 times)

alwaysonit

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Are reinvested dividends included in acc funds price
« on: August 23, 2014, 02:27:08 PM »
Are the reinvested dividends of an accumulation fund included in the index price?

For example, if I buy the fund at 1000 and it finishes the year at the same price of 1000 but payed 2% dividends which were automatically reinvested, when I check the price history of the fund would it be shown as 1000 or 1020 at the end of the year?

Joel

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Re: Are reinvested dividends included in acc funds price
« Reply #1 on: August 23, 2014, 02:46:28 PM »
You would own more shares if their were dividends that were reinvested.

alwaysonit

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Re: Are reinvested dividends included in acc funds price
« Reply #2 on: August 23, 2014, 07:54:32 PM »
Great, that's what I was hoping for.

What is there to stop me buying a stock the day before they pay, say, a 2% dividend and then sell it the next day after they've paid me? Will the value of a stock drop by the dividend amount in general?

Joel

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Re: Are reinvested dividends included in acc funds price
« Reply #3 on: August 23, 2014, 07:56:13 PM »
Yes the value of the stock will dip to absorb the expected dividend.

BlueHouse

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Re: Are reinvested dividends included in acc funds price
« Reply #4 on: August 23, 2014, 08:00:24 PM »
Yes. It's called "buying the dividend". No net gain in value in your account, but it is a taxable event to you. So it's a net loss to you after taxes