Does a funds distribution affect its total return?
A. No. Distributions do not impact total return. Although the NAV drops when the distribution is paid, shareholders who reinvest their distributions also receive more shares. Q. How is a mutual fund affected if there is no required distribution? A. There are no tax consequences to shareholders or to the fund if a distribution is not required. The fund’s net asset value and its investment performance would remain the same. Shareholders will not be required to pay taxes if the fund has not made a taxable distribution. Q. Who is responsible for paying taxes on these distributions? A. Shareholders are responsible for paying taxes on distributions they receive each year, whether they receive the distributions in cash or reinvest them in additional shares of the fund. The funds report distributions to shareholders on IRS Form 1099-DIV at the end of each calendar year. Certain types of fund accounts, such as Individual Retirement and 401(k) accounts, are tax-advantaged. Therefore, shareholder
