Dividend Distributions
Typically, mutual funds distribute capital gains, interest and/or dividends to their shareholders. Specifically, they may earn income from interest on bond holdings and dividends on company shares. They may also earn capital gains when fund managers sell securities within the portfolio for more than they paid for them.
When a mutual fund earns income or capital gains, it passes these earnings to the investor by making what is called a distribution.
Investors may choose to directly deposit distributions into their bank account or have them reinvested in additional fund units without charge. Distributions in registered plans are always reinvested.
Depending on the fund, distributions may be paid monthly, quarterly, semi-annually or annually.
This material is provided for general informational purposes only and does not constitute financial, investment, tax, legal or accounting advice nor does it constitute an offer or solicitation to buy or sell any securities referred to.
The material and/or its contents may not be reproduced without the express written consent of CIBC Global Asset Management.
Past performance may not be repeated and is not indicative of future results.
®Renaissance Investments is a registered trademark of CIBC Asset Management Inc.
CIBC Global Asset Management is a brand name under which CIBC Asset Management Inc. operates.
