IBKR accumulated ETF

Broker FAQ šŸ“ˆ
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1

Thanks again for the Interactive Brokers tip; I bought my first ETF ever. :grin: Sorry, I donā€™t plan to use you as a help desk, but Iā€™ll try a beginner question anyway, in case you answer. In one video, they mentioned that for tax reasons itā€™s simpler to buy an ā€œaccumulatedā€ ETF, but I donā€™t see how/where to see/select this on the interface. How do you usually do it?

2

Hi there,

Thanks for your message. Choosing between distributing and accumulating ETFs can indeed have tax implications, depending on your jurisdiction. Accumulating ETFs automatically reinvest any dividends or interest income back into the fund, which means you wonā€™t receive regular payouts but instead benefit from compound growth. This reinvestment can be advantageous for tax purposes in certain countries where dividends are taxed upon receipt. They can also save you money on transaction costs if you were to do the same anyway.

To find and select accumulating ETFs on an investment platform or brokerage interface, here are steps you can typically follow:

  1. Navigate to the Trading Platform: Once logged in, navigate to the trading platform or dashboard where you can search for and trade ETFs.
  2. Search for ETFs: Use the search functionality or browse through the available ETFs to find the one youā€™re interested in. You can typically search by name, ticker symbol, or asset class.
  3. View ETF Details: Click on the specific ETF youā€™re interested in to view its details and specifications. This should include information about its distribution policy.
  4. Check Distribution Policy: Look for information related to the distribution policy of the ETF. Interactive Brokers typically provides comprehensive details about the ETF, including whether itā€™s accumulating or distributing.
  5. Review Dividend Reinvestment: Pay attention to how dividends are handled. For accumulating ETFs, dividends are typically automatically reinvested into the ETF rather than being distributed to the investor.

You can also check this guide I found on IBKRā€™s website: Accumulate/Distribute.

Meanwhile, if you encounter any difficulties or need further assistance, you can also reach out to Interactive Brokers customer support for help.

If you have any further questions please let us know.

Kind regards,
Andris