Funds can have cash dividends (like shares), but is there the possibility of not receiving the dividend on cash and receiving additional units of the fund : similar to a stock dividend on shares where holder of the shares gets additional shares.

Is this what accumulation (on Funds) is about? Are there any other income types on funds?



1 Answer 1


Mutual funds can have three kinds of cash distributions: Dividends, short term capital gains and long term capital gains. Not all funds have all three types. Whether you can have the cash distributions used to buy additional units of the fund is a feature of the platform you trade on, not the fund itself. Use the help desk at the company that holds your account to see if that is an option you can set. Even if you do use the cash to buy additional fund units, you will be liable for taxes if it is a taxable type account.

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