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What is difference between an Income and an Accumulation Fund?
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Income funds are set up so that when income is earned by an investor the fund manager will pay that income out to the investor in the form of a cash payment.

Accumulation funds on the other hand automatically reinvests all income earned by an investor back into the fund. This is usually reflected in an increase in the unit or share price of the fund.

Funds make the distinction between Income and Accumulation status in two different ways. Some funds have two separately created and operated funds (e.g. the Deutsche Corporate Bond Plus fund has two separate funds one called Deutsche Corporate Bond Plus Income and the other call Deutsche Corporate Bond Plus Accumulation).

The other form of distinction which is more common is that there is one fund and you can make a selection of either reinvesting your income or having your income paid to you in cash.

Interactive Investor also provides a facility whereby if the fund you wish to invest in does not offer income reinvestment, you can instruct Interactive Investor to reinvest income it receives on your behalf. You should note however that if Interactive Investor reinvests the income on your behalf you will incur the standard initial charge which would not be the case if the fund manager performs the reinvestment.
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