Understand account values during distribution periods

Why account balances can temporarily look lower and what it means for your clients.

5 minutes
On this page
Distributions are a normal part of managed fund investing but they can impact how account balances appear in the short term.
This guide helps you explain what’s happening, so your clients stay confident and informed.

Temporary drops aren’t losses

Account balances may look lower while income is being processed.

Distributions are still being paid

Income such as dividends, rent and capital gains continues to flow through to accounts. 

Timing matters

Delays between distribution and reconciliation can impact what clients see in real time.

The true value remains intact

Once processed, the account reflects the full value including distributions.

What’s happening during distribution periods?

  • How distributions work
    • Fund income is accumulated and later distributed to investors
    • Capital gains become part of income when realised
    • Distribution timing varies by fund manager.
  • Why balances change
    • Income may be paid but not yet reflected in your account
    • Unit prices adjust once distributions are separated
    • This can make balances temporarily appear lower.

Income payments from managed funds

Managed funds generate income throughout the year through dividends, rent, interest and capital gains from underlying investments.

At certain times of the year, this income is paid out as distributions. While this is happening, you may notice changes in how account balances appear.

Ahead of a distribution, unit prices include both the value of the investments and any income that has built up: Unit price = value of assets + income received + realised capital gains

Account balance
Account balance closing 14 July
Account balance
Account balance closing 16 July
Interpreting the account balance

1. During processing (e.g. 14 July). Income has been paid but is still being processed by the custodian. As a result, the account balance may appear lower and not reflect the full value.

2. After reconciliation (e.g. 16 July). Once processing is complete, the income is applied to the account and the balance adjusts

Changes in investment earnings reflect normal market movements, not the distribution itself.

3. The full account value is restored. The account now reflects both the underlying investments and the distributed income, showing the true value.

 

The distribution process

North estimated distribution timeframes
Effective dates of Income distributions  30 June  31 December
Period when the account balance will be lower than expected  Between above dates and below dates Between above dates and below dates
Date income is received on North By 31 July*
 By 31 January*


* We expect the majority of distributions should be received by the above dates, however some fund managers may take longer.

Important to note

While the distribution process can affect how account balances and unit prices appear in the short term, it doesn’t change the underlying value of your client’s investments. Capital gains form part of overall income and are treated accordingly, and it’s helpful to focus on the total outcome. Both unit pricing and the number of units held before and after distributions.

In many cases, clients may hold more units after a distribution, and if there’s been no change in the underlying asset values, the overall account value remains consistent. In other words, what you’re seeing is a timing effect - not a loss of value.

Unit values and the distribution process
  • Pricing on the distribution payment day will include an income component and therefore show an artificially high unit price
  • On close of business the same day, accrued income will be separated and paid to the platform. The unit price will now represent the true capital value of the underlying assets (July distribution only)
  • The unit price will drop as a result of the income being paid out
  • Delays occur when fund managers publish their unit prices. It can take between 4 – 7 days to see a drop in the closing balance. Actual timing may be longer depending on individual fund manager schedules and liquidity
  • The custodian reconciles the distributed income to client accounts, and payments are made from the platform back to the client
  • The fall in the unit price is generally compensated by the income payment. The payment can be invested to purchase new investment units or remain in the working cash account. 
Distribution Process

Frequently Asked Questions

When a distribution is paid, the value of your investment may temporarily decrease because the distribution amount is reflected in the fund’s unit price. This is a normal part of how managed funds operate.

A distribution is the income a managed fund earns (e.g. dividends, interest, gains) that is paid to investors who are invested in the fund on the date when the distribution is paid during the distribution period.

Log into North Online > Click on the account > Account movements 

Generally, No. When a distribution is paid, the value is transferred from your investment to the cash account. Your overall account balance may still vary depending on market movements.

We do not have fixed timeframes for this process, as it depends on when the fund manager processes the distribution. We rely on external fund managers to provide this information. Typically, distributions are paid by the last week of the month following the end of the distribution period.

Fund managers distributed income generated by the investment. Once received and processed, the distribution is paid into your cash account and then invested as per the investment instructions that havebeen set by your financial adviser or you.

Managed Funds earn income in the form of dividends and interest. They also realise capital gains. Funds managers are obligated by tax law to pay out both of these components to investors in the form of distributions.

Distribution payments can take the form of cash paid to the investor or as additional units reinvested into the relevant managed fund. Cash payments are paid into your cash account and reinvested based on your buy instructions.

Distribution amounts vary and depend on the income and investment performance generated by the fund.

Distribution timing is determined by the fund manager, and processing timeframes may vary.

The distribution amount is reflected in the unit price once it is paid, which can result in corresponding reduction in unit price.

Even after a fund manager has made a payment, it may take a little longer for the distribution to appear in your account. This is because the payment needs to be processed and applied to the correct investors.

Unfortunately, North cannot manually expedite individual distributions payment. Distributions are processed through a controlled process to ensure all investors received the correct entitlement. Once all required has been received and validated, distributions are processed as soon as practicable. 

Not necessarily. Distributions vary from year to year and are not guaranteed. Some investments may pay a distribution. Some may not pay a distribution at all in a given year depending on the income generated by the investment and market conditions

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