Dividends
An accumulating fund automatically reinvests its income, such as dividends and interest, instead of paying it out to investors.
An accumulating fund or ETF automatically reinvests the income it earns (dividends, interest) back into the fund. The opposite is a distributing fund, which pays earnings out to investors.
Advantages of accumulation: the compounding effect is stronger because income is reinvested immediately. It also avoids the transaction costs of reinvesting manually.
For tax purposes, since 2018 the advance lump-sum tax (Vorabpauschale) has largely put accumulating and distributing funds on an equal footing. Even so, the deferral of tax can still be an advantage with accumulating funds.
See taxes, dividends and allocation for your whole portfolio in one place.