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Share Classes: Accumulation vs. Income

When buying a fund, should you buy the accumulation or the income share class?

Alanna Petroff 15 August, 2012 | 0:00


After completing your due diligence, you’ve decided to buy a new fund. It’s called Fantastic Fund. You’ve looked at all the other funds out there, but Fantastic Fund is the one for you. But now comes another decision: which share class should you buy? You can choose between the “accumulation” or “income” share classes, otherwise known as “Acc” or “Inc”.

Buying the accumulation share class would mean that your net income from Fantastic Fund would be reinvested back into the fund, with no charge to reinvest. The other option – the “income” share class – would pay out all of the fund’s net income to you in cash. This would allow you to use the money towards other investments or living expenses.

What to do?

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About Author

Alanna Petroff

Alanna Petroff  is a financial journalist with Morningstar UK.

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