This chapter explains the process mutual funds use to distribute earnings to shareholders.
Periodic Dividend Funds
Daily Dividend Funds
Money Market Funds
Impact on NAV
· dividends paid to the portfolio by stocks held in the portfolio, andinterest paid to the portfolio by bonds held in the portfolio
Dividends are normally considered “ordinary income”, and taxed at the shareholder’s regular income tax rate.
· Equity funds (also called periodic funds, or equities)
· Daily dividend funds (also known as daily accrual funds, income funds, bond funds, or dailies)Money Market funds.