Accumulating or distributing ETF
An accumulating ETF reinvests income inside the fund; a distributing ETF pays it to holders.
Definition
An accumulating ETF reinvests income inside the fund; a distributing ETF pays it to holders.
Why this concept matters
This difference changes cash flows and how returns compound.
How it works
In the accumulating share class, income remains in the fund and increases its theoretical value. In the distributing share class, it leaves the fund and is paid in cash.
What to watch
Tax, fees and eligibility depend on the country, account and fund.
Simple example
A distributing ETF may pay €30 while an accumulating ETF reinvests an equivalent amount.
Example currency : France (EUR). The reference country controls the example currency.
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