July Income Distributions

At the end of the financial year, fund managers calculate realised profits (realised capital gains, dividends and interest received) that the fund has made during the financial year and these are required to be paid to investors in the form of an income distribution, which is usually paid during July.

The unit price of the fund is adjusted as at 1 July to reflect the distribution that is paid later in the month. During this interim period between 1 July and the date that any distributions are paid to your portfolio cash account (typically mid-late July), it can look as though your portfolio balance has reduced. In addition, the fund managers can be delayed in updating their unit prices until such time as they’ve calculated and paid income distributions, and as such your portfolio balance may not be updated as frequently during this period. However, the amount your balance reduces by, is approximately the total amount of the distributions which are due to be received into your cash account during July.

This income distribution acts in a similar way to a listed company that pays dividends.

We occasionally receive questions about this during July, so we thought this note would benefit any investors curious as to their account balance activity in July.

We have tried to display this in a picture below.

Please contact us if you have any questions or would like to discuss.