Funds can generate income when the underlying investments (for example, stocks and shares) pay income or dividends. If you buy Income units in a fund, the income will be paid out to you. If you buy Accumulation Units then the income is automatically reinvested by the fund manager. Not all funds have both unit types available.

Accumulation Units

Accumulation units are shown by the blue a after the fund name.

With accumulation units the income is reinvested automatically thereby increasing the price of the unit trust. Accumulation units, although not paying income, will still generate a tax voucher as the income generated is treated as income for tax purposes.

Income Units

Income units are shown by the green i after the fund name.

With income units the income is paid out monthly, quarterly, six monthly or annually depending on the fund. Any payments made are treated as income for tax purposes.

The following options are available:

  • reinvest the income by buying units in the funds. This will happen shortly after the distribution pay date of the fund.
  • pay income into your Cofunds Cash Account. This will happen shortly after the distribution pay date of the fund.
  • income paid into a nominated bank account. On the Cofunds platform, income is consolidated together during the month and paid out to your bank account on or shortly after the 6th working day of the following month.