Introducing distribution reinvestment

2 min read  
Date: 04 November 2016

 

We are pleased to announce the launch of the Distribution Reinvestment option enabling clients to have managed fund distributions reinvested back into the same funds.

This new feature can be used in conjunction with (or instead of) the monthly Income Reinvestment option we’ve always offered.

Income can be reinvested into managed funds via one or both of these methods:

  • Distribution reinvestment, where distributions received from managed funds can be reinvested back into those same managed funds; and
  • Income reinvestment, where on or around the 20th of each month, the net income accumulated in an account will be reinvested into one or more managed funds in accordance with the nominated Income Reinvestment Profile.
Distribution reinvestment

Distribution reinvestment provides the facility for managed fund distributions to be reinvested back into the same managed funds.  This can be elected for one, many or all of the managed funds held in an account.  Distributions will be automatically reinvested as soon as they’re received in cash  (which may be up to several weeks after the end of the distribution period).  Distributions will be reinvested on a pre-tax basis and at the prevailing market prices for managed funds they’ve elected for Distribution Reinvestments. Note that reinvestment will occur for distributions of more than $5. 

Income reinvestment

Income reinvestment enables clients to nominate a profile of one or more managed funds for reinvestment of the ‘net income’. On or around the 20th of each month, we will calculate the amount of income earned on a client’s investments and add any employer contributions and/or regular contributions or deposits (if applicable). We then deduct expenses incurred during the month and any amounts that have already been reinvested through the Distribution Reinvestment process to determine their net income amount.  Then, the greater of a client’s ‘net income’ and the amount of cash they have classified as ‘available for investment’ will be reinvested in accordance with their Income Reinvestment Profile.

Both Distribution Reinvestment and Income Reinvestment are available for managed funds only.

Reinvestment instructions can be provided when an account is first opened, or at any time thereafter via the online ‘Reinvestment’ transaction or completion of a ‘Reinvestment Plan’ form. Reinvestment instructions will continue to apply until they’re amended or revoked.