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How Are Dividends Calculated on Mutual Funds?

April 26, 2017calculated dividends Mutual funds

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How Are Dividends Calculated on Mutual Funds?

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A mutual fund is an investment company that takes contributions from individual investors and pools them into a common investment fund. Although capital appreciation is one way that mutual funds provide a return for investors, many funds also distribute dividends. In order to qualify as a mutual fund for tax purposes, an investment company must follow strict regulations regarding the calculation and distribution of dividends to investors.