Distributing (fund/ETF)

A distributing (ausschüttend) fund or ETF pays out income (dividends, interest) to you regularly – the money goes straight into your account.

How it works:

• The companies in the ETF pay dividends
• The ETF collects these dividends
• And distributes them to you: quarterly, semi-annually or annually
• The money then sits in your clearing account – you decide what happens to it

Distributing vs. accumulating:

Distributing:

✅ Regular income ("passive income")
✅ Ideal for using up the saver's allowance (€1,000)
✅ Psychologically motivating (you "see" the returns)
❌ You have to reinvest the distributions yourself (effort)
❌ Compound interest effect slightly weakened (if you don't reinvest)

Accumulating:

✅ Income is reinvested automatically (compound interest!)
✅ No action needed – runs by itself
❌ The advance lump sum (Vorabpauschale) is due every year (a small tax even without selling)

When to choose distributing?

• Saver's allowance: from approx. €50,000 in the ETF (at ~2% distribution) you reach the €1,000 limit
• Withdrawal phase: in retirement for a regular income
• Motivation: if you like seeing "real money" in your account

Example: iShares MSCI World (Dist) distributes approx. 1.5–2% p.a. With a portfolio value of €100,000: approx. €1,500–2,000/year in passive income.