This is to those saying that accumulating ETG dividend are lost when crash happens and I'll try to explain why it's not true. As an accumulating ETF, when dividend are paid, it is automatically reinvested into the ETF through new assets acquisition like buying more of the stocks in the ETF basket stock. If you keep track of the growth (asset appreciation + dividend yield), you will notice that the appreciation rate of accumulating ETF is much higher compared to the appreciation rate of distributing ETF. I.e. compare the growth rate of another distributing ETF that tracks the same index as IWDA, the growth of distributing is definitely lower than IWDA. Compare it with SWDA, distributing equivalent(but its traded in GBP)
That is because accumulating asset automatically reinvest your dividend, you own more and more stock over time.
For distributing ETF to have the same effect, you will have to redirect your dividend payout into more holdings of the same ETF to have the same effect as accumulating ETF.
So, no your dividend are not gone per say, your total equity just experience a -27% just like any other other equities.
Tldr: you accumulating ETF assets appreciate faster compared to distributing ETF but when financial crisis comes, both class will still experience the same downturn.
Acc/dis
100/100
Acc etf experience 30% price appreciation due to acc effect.
Dis only experience 10% over the same period of time.
So it becomes
Acc/dis
130/110
Financial crisis comes and both experience a 27% plunge.
Acc/dis
94.5/80.3
I'm not a good explainer and I'm typing all these on phone so pardon the quality of post. But i hope you get a clearer picture of what's going.
Take a look at this real example of IWDA and URTH. They are tracking the exact thing thing, the only difference is IWDA being a accumulating ETF and URTH distributing.
IWDA 5yr net return on price appreciation is +17% while URTH 5yr net return on appreciation is mere +0.88%.
