Unlike an accumulation fund, a distribution fund pays its unit holders, on a set schedule (monthly, quarterly, or annually), the dividends and coupons collected from the shares and bonds in its portfolio.
When it's a good fit
It's usually chosen when the investor is looking to generate a periodic income — for example, to supplement earnings during retirement — rather than continuing to grow the capital untouched.
Taxation
Each payout is taxed as investment income in the year it's received, unlike an accumulation fund, where there's no taxation until units are redeemed.