How do reinvested dividends affect mutual fund assets?
While they are not included in net new cash flow, reinvested dividends have a positive affect on mutual fund assets. By deciding to reinvest dividends back into their funds, mutual fund shareholders continue to purchase new shares and build assets without adding new cash to the fund. In fact, shareholders reinvested nearly $85 billion of dividends into their accounts in 2002. In 2001, the amount of dividends reinvested was approximately $119.
