Glossary

An accumulating ETF (Exchange-Traded Fund) is a type of ETF that reinvests any dividends or interest generated by the underlying assets back into the fund. 🔄

This leads to an increase in the net asset value (NAV) of the ETF over time, allowing investors to benefit from the power of compounding without having to manually reinvest their dividends.

For example, consider an accumulating ETF that tracks the S&P 500 Index. Instead of distributing dividends to its investors, the ETF would reinvest those dividends back into the fund, increasing its NAV and, consequently, the value of each share.

Fun fact: Accumulating ETFs are particularly popular among long-term investors 🌱 who want to maximise their returns by taking advantage of compounding effects. These ETFs can be an efficient way to grow your investment over time, especially if you have a low-risk tolerance or prefer a more passive investment strategy. 🛀