Accumulating ETF's are ETF's that automatically reinvest the dividends issued by the underlying shares, without extra expense for the account owner, resulting in that sweet compounding effect we all cherish.
If I understood correctly, this happens by a small increase of the Net Value (NV, the total worth of the ETF) and the Net Asset Value (NAV, the NV divided by the number of outstanding ETF shares) any time an underlying dividend is issued. But this is the part that confuses me.
Doesn't this mean that the ETF becomes more and more expensive compared to its original index after time, as the NAV goes up with each dividend and the index doesn't?
Thanks a lot in advance.
Submitted January 31, 2023 at 03:45AM by Surprise_Creative https://ift.tt/qaFzOZs
