Do Mutual Funds Really Offer?

Mutual funds usually distribute accumulated dividens and capital near year end. So if you invest in a fund in December, you’ll receive a nice holiday bonus, right? wrong.

The facts;

If you invest roght before a distribution date, you’ll soon receivere a year’s worth of income, but the value of your shares will immediately drop by the same amount.

You’ll be liable for taxes on the distribution as if you had owned your shares all year.

Like cas distributions, automaticaly reinvested distributions are taxable.

Automatic reinvestment increases your tax basis in a fund.

You can learn When a fund plans to make a distribution by checking its website.