Pre-XD vs post-XD: Does dividend timing matter?

Congratulations! You’ve just inherited £100,000 from Great Uncle Bertie. Good old Bertie. Always liked him. Naturally, you’re going to invest this for your future financial well-being. The pleasantly unexciting Vanguard LifeStrategy 60 will do nicely. Your tax allowances are already spoken for. So, at least for now, you’ll need to resign yourself to paying tax on your gains in a General Investment Account (GIA). You also know that investing everything ASAP is statistically the best approach. However, (our hypothetical) today is the 31 March and the fund goes XD tomorrow. Should you invest today or wait until tomorrow? What is XD? Does any of this even matter? If you don’t want the detail, then the short answer is it matters a bit in terms of tax but for the most part you can ignore it. But if you don’t want the detail then why are you reading Monevator? Let’s get into it. Dividends Most funds generate regular dividends. They could be paid annually, bi-annually, quarterly or monthly.…