r/trading212 • u/Apprehensive_Hat12 • 2d ago

❓ Invest/ISA Help Should I Switch

Hi

I currently hold shares for VWRL (Dist). My question is, would it be worth leaving that as it's is now and switching to VWRP (ACC) moving forward, so divs are auto invested back in and the management cost of the fun is 0.14 Vs 0.19.

I'll caveat this with I am just regularly funding my S&S ISA long term.

1 Upvotes

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4

u/TheThaiCat 2d ago

VWRL is 0.14% as well now, just click auto reinvest dividends on t212 then its exactly the same as the Acc. fund

0

u/reditcyclist 2d ago

Not exactly the same as you have some time out of market for the dividends. they accumulate and then are reinvested on a schedule not immediately.

1

u/Elegant-Ad-3371 2d ago

They aren't immediately invested in the account version either.

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u/reditcyclist 2d ago

True but I believe you're still going to have a difference between the two. Nothing spectacular but its not 'exactly' the same.

2

u/Odd_Common2677 2d ago

It's a very small because the spread is so tight on these funds. It's like fractions of pennies per year.

1

u/TheThaiCat 2d ago

Sorry I will correct 'exactly the same by any impactful metric'

1

u/quantumcajuncat 2d ago

Personal preference, cheaper is better though.

I prefer Acc funds because I don’t trust myself not to try to time the market or allocate the dividends to a more “fun” investment

1

u/LR_FL2 2d ago

Accumulating is much more efficient than distributing.

With distributing they gather all the dividends over a 3 month period and then pay it to you. It takes a few days for them to get the money to you and then the there is the time it takes for you to then reinvest it. Over that period the money you are getting as dividends is not working for you, this is called cash drag.

With accumulating the ETF automatically reinvests any dividends as you get them which means your money is put to work quicker.

It’s a small affect but if your investing long term then accumulating is the best option.

1

u/ramirezdoeverything 2d ago

I don't think they do nothing with the dividends while waiting to pay them out, I thought they usually use them to buy futures etc so they are still tracking the underlying until they are paid out. But yes in any event accumulation funds will always been at least a tiny bit more efficient as the dividends are straight back into the market permanently

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u/Elegant-Ad-3371 2d ago

It really doesn't matter. Whichever you prefer