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Topic | Anybody understand stocks? Why choose S&P 500 over Russell 2000? |
captpackrat 06/29/21 9:13:07 PM #5: | FatalAccident posted... Ok thanks @captpackratThe distributing version you have to keep buying new shares every time there is a distribution if you want to reinvest that money, and you may have to pay whatever fees your broker charges each time you buy more shares. With the accumulating version you keep the same number of shares but they just increase in value so it's basically a one-time purchase. So with VUAG if you bought 1 share at $100 and the value doubles, you'd end up with 1 share worth $200. With VUSA if you bought 1 share at $100 and the value doubled, you'd have 1 share worth $100 and $100 cash. If the value doubled again (and you failed to reinvest any dividends), VUAG would end up with 1 share worth $400, and VUSA would have 1 share worth $100 and $200 cash. If you did reinvest in VUAG you'd have 2 shares worth $200 and $200 cash, minus your broker's fee for purchasing the additional share. There may also be tax considerations. With the accumulating version you'll have to pay capital gains tax only when you sell your shares, with the distributing version you'll owe dividend tax for every distribution. --- Minutus cantorum, minutus balorum, Minutus carborata descendum pantorum. ... Copied to Clipboard! |
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