There are two types of ETFs: Accumulating (Acc) and Distributing (Dist).
Accumulating ETFs (like most of the ones seen in the managed growth range) re-invest dividends at a fund level. Meaning, that no dividend payment will be issued by the ETF but rather the proceeds will be re-invested into the ETF. Holders of the ETF will still benefit from these corporate actions via an appreciation of the value of the ETF.
Distributing ETFs pay out dividends, and these are paid out on the portfolio level. Your portfolio type determines how dividend payments are treated.
If you are using an Income portfolio, dividends are paid to your portfolio and the income is then paid to your Cash account respectively at the beginning of the following month. Please note: income portfolios are now legacy products.
Growth and DIY portfolios will receive dividends as cash payments into the portfolio as soon as we receive them. These payments will be treated in the same way as top-ups or any other new funds.
If you are using a Managed Growth portfolio or DIY portfolio with the AutoInvest setting ON, the dividend will be automatically invested in your portfolio.
If your DIY portfolio's AutoInvest setting is OFF, the dividend will stay as cash in the portfolio balance. You can move it to your Account cash, withdraw it to your bank account or manually invest it in the portfolio or into a single ETF.
In an ISA portfolio, distributed dividends don't reduce your remaining ISA allowance.