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Accumulating (fund/ETF)
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With accumulating ETFs/funds, dividends are automatically reinvested instead of paid out. This maximises the compound interest effect and is often more tax-efficient.
An accumulating (thesaurierend) fund or ETF automatically reinvests all income. When the shares it holds pay dividends, these are immediately reinvested in the fund – making your units more valuable.
Advantage: maximum compound interest effect. You don't have to do anything – the dividends keep working for you right away.
Opposite: distributing funds pay dividends straight into your account. This can make sense if you need a regular income from your investments.
For investors building wealth (most young people), accumulating is usually the better choice.
Did you know? Thanks to compound interest, €10,000 grows to more than €76,000 in 30 years at a 7% annual return – without compounding it would be only €31,000.
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