Payment of some amount of a company's profit from sales of securities made to shareholders.
Distribution occurs near the end of the calendar year for equity funds and monthly for bond funds. These distributions are taxable as income for the recipients. Many funds allow automatic reinvestment instead of distribution, which, in light of their taxability, is sometimes preferable for high bracket investors. This can also be beneficial for the funds themselves since distribution generally reduces the value of the fund.
Related Words
