A DRP automatically reinvests distributions in additional units in the fund.
You can either opt in to full DRP or alternatively receive your distribution in cash.
Whether you should take your distribution in the form of cash or elect to participate in a DRP (where one is available) depends on your individual circumstances and investment goals. Participating in a DRP can be a convenient way of increasing your investment.
You are not charged brokerage on the incremental amount invested. Therefore, if you don’t need the cash, participating in a DRP can help you to increase the value of your portfolio.
A DRP also enables you to enjoy the benefits of compounding. As your holding of units increases over time, you will essentially be increasing your investment amount and may potentially benefit from distributions paid on your increased holding.
If, however, you rely on your investment income for your living expenses, you may be better off taking your distributions in the form of cash.
Betashares currently offers DRP on Betashares Australian Investment Grade Corporate Bond Fund (NZD Hedged). Importantly, the default position when you invest is for DRP to be enabled.
The way you opt in/out of DRP depends on how you invested in the fund:
- Direct investment: a DRP election can be made when you initially apply for units or alternatively you may wish to elect into, or out of, the DRP for your existing holdings by contacting Link Market Services.
- Investment via a platform: Please contact your platform provider to find out how you can elect into, or out of, the DRP.
