There is currently no option to automatically reinvest distributions back into the Income Portfolio.
- What's the difference between accumulating (Acc.) and distributing (Dist.) share classes, and which one should I choose?
- Where do my Income Portfolio distributions get paid out to?
- I want to reinvest my Income Portfolio distributions — what can I do in the meantime?
1. What's the difference between accumulating (Acc.) and distributing (Dist.) share classes, and which one should I choose?
- Distributing (Dist.): Income earned by the fund (interest, dividends, coupons) is paid out to you as cash. This is the share class our Income Portfolios use, since the objective of these portfolios is to generate regular monthly payouts.
- Accumulating (Acc.): Any income earned is automatically reinvested back into the fund at the fund level instead of being paid out, which grows the fund's unit price (NAV) over time.
The right share class depends on your investment objectives:
- If you want regular cash payouts (e.g., to supplement income, fund expenses), Distributing share classes are more suitable.
- If you'd rather reinvest and compound your returns instead of receiving cash, you'll want exposure to Accumulating share classes (see Q3 below).
2. Where do my Income Portfolio distributions get paid out to?
Distributions from the Income Portfolios are paid out to either your Endowus Uninvested Cash Balance, or credited to your linked bank account.
3. I want to reinvest my Income Portfolio distributions — what can I do in the meantime?
We’re working to provide you with the ability to have the distributions of your Income Portfolios be automatically reinvested and will share more when that feature is made available. As an interim workaround, you can set up a Fund Smart portfolio and select the Accumulating share classes of the same underlying funds used in the Income Portfolio, where available. This way, any income generated will be automatically reinvested rather than paid out to you.
While this works as a stopgap, it isn't a perfect substitute for the Income Portfolio, and there are a few trade-offs to be aware of:
- No portfolio rebalancing: Income Portfolios, like all our advised portfolios, are actively monitored and rebalanced by Endowus. In a Fund Smart portfolio, if the underlying fund weights or Income Portfolio construction changes, your Fund Smart goal won't automatically follow.
- Recurring investment / inter-goal transfer limits: If you're trying to route the distribution into another goal via a recurring investment, this only executes once the combined distribution reaches $100 or more. Smaller distributions will simply sit uninvested until the threshold is met.
- Out-of-market time and price differences: While the distribution sits in cash waiting to be reinvested (or waiting to hit the $100 threshold), it's out of the market and not earning a return. There can also be a difference between the fund price on the distribution date and the price on the date you actually reinvest, which can create a small drag or gain versus a true auto-reinvestment.
- Manual setup and upkeep required: You're responsible for setting up and maintaining the Fund Smart replication yourself; it won't be managed on your behalf the way an Income Portfolio is.