What’s the difference between accumulation and income units in a fund?
24 June 2025
Question by Amir
I’m trying to buy a fund and it’s offering ‘acc’ or ‘inc’ units. What’s the actual difference and how do I know which one to pick?
Answered by Boring Money
When you purchase shares in a fund, you might come across different versions of the same fund, typically with either 'Acc' or 'Inc' at the end. They stand for:
‘Acc’ = Accumulation
‘Inc’ = Income
They're still the same fund, but the difference lies in what happens to any dividends or interest it earns from its underlying investments.
With accumulation units, any income the fund makes gets automatically reinvested. You don’t see it as cash in your account - instead, it reinvests this cash to buy more units of the fund, quietly growing your investment through the power of compounding.
With income units, any income is paid out to you (the shareholder) as cash. You’ll see it land in your account, typically quarterly or annually, and can be a good way of earning a regular income without confining yourself to cash interest.
As for which one you should buy, that's a personal question that comes down to your investment goals. Would you rather snowball your earnings to increase their value over time - "growth investing" - or do you prefer the idea of a regular stipend from your investments - "income investing"?
If you need your investments to give you an income - this is often the case for those in retirement, for example - you would look at 'Inc' (income-producing) investments. Whereas if you don't want to take income or money out, just to invest as much as possible, this would lead you to look at the ‘Acc’ version of a fund.
Hope this helps!
