As part of our income special report week, we look at a fictional example of a fund manager, explaining what “income” and “accumulation” really mean.

Let me tell you a story about an award-winning fund manager.

He’s called Henry Whittaker and he manages a very popular fund for St Paul’s Asset Management (SPAM) in London. Since its inception in 2012, Whittaker’s Robotics and Intelligence Equity fund (RIEF) has attracted nearly a billion quid in assets.

Despite a rough time last year and some noticeable outflows, performance is now sufficiently attractive that it could be worth jumping on the bandwagon before it’s too late.

Off you go to your fund supermarket online (otherwise known as a retail investing platform), where you double-check your budget and get ready to buy. But suddenly you face a choice: do you buy the “acc” share class, or the “inc” share class?

Gulping, you sip your tea and open a Google tab.

Acc and Inc: The Key Difference

Stop. You may need that tea, but you don’t need Google, because we’re here to spare your blushes. So just what is “inc” and how does it differ to “acc”?

Before we began, let’s just note one thing. SPAM and RIEF are entirely fictional examples, and poor Henry is just a figment of my imagination. But they’re helpful examples that might help all this feel real without making it intimidating. 

Put simply, “inc” and “acc” mean “income” and “accumulation”, respectively. Usually, these are the two different unit options on offer to investors. Choosing one will affect how dividends are paid to you.

“Acc” units reinvest the dividends the fund receives on your behalf. That means that, when you buy RIEF from SPAM on your platform, the net income from the fund will be reinvested back into the fund at no charge to you.

Income units are different. Rather than reinvesting any dividends, income units pay them out into your platform’s cash or ISA account, or just directly into your bank account.

At this point, it’s worth noting many income funds are “acc” units designed to harness the power of compounding growth. By reinvesting dividends immediately, investors get all the benefits of the gathering momentum a fund will establish its investments are successful (in theory)

Note too that, in the event you choose an “inc” fund, you may have to decide when you get your money. Some funds will offer

As part of our income special report week, we look at a fictional example of a fund manager, explaining what “income” and “accumulation” really mean.

Let me tell you a story about an award-winning fund manager.

He’s called Henry Whittaker and he manages a very popular fund for St Paul’s Asset Management (SPAM) in London. Since its inception in 2012, Whittaker’s Robotics and Intelligence Equity fund (RIEF) has attracted nearly a billion quid in assets.

Despite a rough time last year and some noticeable outflows, performance is now sufficiently attractive that it could be worth jumping on the bandwagon before it’s too late.

Off you go to your fund supermarket online (otherwise known as a retail investing platform), where you double-check your budget and get ready to buy. But suddenly you face a choice: do you buy the “acc” share class, or the “inc” share class?

Gulping, you sip your tea and open a Google tab.

What’s The Difference Between Acc & Inc?

Stop. You may need that tea, but you don’t need Google, because we’re here to spare your blushes. So just what is “inc” and how does it differ to “acc”?

Before we began, let’s just note one thing. SPAM and RIEF are entirely fictional examples, and poor Henry is just a figment of my imagination. But they’re helpful examples that might help all this feel real without making it intimidating. 

Put simply, “inc” and “acc” mean “income” and “accumulation”, respectively. Usually, these are the two different unit options on offer to investors. Choosing one will affect how dividends are paid to you.

“Acc” units reinvest the dividends the fund receives on your behalf. That means that, when you buy RIEF from SPAM on your platform, the net income from the fund will be reinvested back into the fund at no charge to you.

Income units are different. Rather than reinvesting any dividends, income units pay them out into your platform’s cash or ISA account, or just directly into your bank account.

At this point, it’s worth noting many income funds are “acc” units designed to harness the power of compounding growth. By reinvesting dividends immediately, investors get all the benefits of the gathering momentum a fund will establish its investments are successful (in theory)

Note too that, in the event you choose an “inc” fund, you may have to decide when you get your money. Some funds will