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Why does your NAV go down when your Mutual fund pays a dividend?
Wiki User
∙ 16y ago
The cash the fund uses to pay the dividend is considered an asset of the investment trust. Before it is paid out, that value is added to the value of the stocks/bonds held to calculate the NAV. Once the money is paid out, it is no longer counted as part of the investment trust, thus the NAV goes down by the amount of the dividend.
Example. Mutual fund A has $100 worth of stock, $50 in cash and 100 shares outstanding. It's NAV is $1.50. It pays a total dividend of $50. So now the fund has $100 worth of stock, no cash, and 100 shares outstanding. It's NAV will be $1.00.
Wiki User
∙ 16y ago
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What is the difference between exchange traded funds and mutual funds?
Most mutual fund investors take advantage of their fund's automatic dividend reinvestment feature. That saves them the hassle of deciding what to do with the cash that comes their way periodically. If and when the mutual fund pays out a cash dividend, your cut of the dough is automatically reinvested in shares, or partial shares of the fund.
Who pays the highest dividend rate among mutual insurance companies?
Mass Mutual pays 7.6% for 2009
What is the difference between mutul fund with insurance?
In order for there to be a difference, there must be two nouns and a conjunction. I assume the question thus refers to mutual fund and insurance. They are completely different, the best way to describe the difference is simply by stating their definitions. A mutual fund is a fund to invest for several people to pool their resources. Insurance is a contract in which the client pays a given amount for a contingent payment in the future should a given event occur.
What type of stock usually pays a dividend?
established companies
What is MER in mutual Fund?
1. Management Expense Ratio (MER)The MER is an annual fee that's charged to a mutual fund to pay for such expenses as: * management fees paid to the managers of the fund * adviser sales commissions and ongoing service (trailer) fees * legal and audit fees * custodian and transfer agent fees * fund administration expenses * marketing expenses (guess who pays for all those TV, radio and print ads?) Here is a link with answers on other terms. http://www.bylo.org/affordmf.html
What is the difference between exchange traded funds and mutual funds?
Most mutual fund investors take advantage of their fund's automatic dividend reinvestment feature. That saves them the hassle of deciding what to do with the cash that comes their way periodically. If and when the mutual fund pays out a cash dividend, your cut of the dough is automatically reinvested in shares, or partial shares of the fund.
Who pays the highest dividend rate among mutual insurance companies?
Mass Mutual pays 7.6% for 2009
What is the difference between mutul fund with insurance?
In order for there to be a difference, there must be two nouns and a conjunction. I assume the question thus refers to mutual fund and insurance. They are completely different, the best way to describe the difference is simply by stating their definitions. A mutual fund is a fund to invest for several people to pool their resources. Insurance is a contract in which the client pays a given amount for a contingent payment in the future should a given event occur.
What type of stock usually pays a dividend?
established companies
What mutual whole life policy pays the highest dividends?
Northwestern mutual
What type of life insurance pays a dividend?
Group life assurance
A common stock which pays a constant dividend can be valued as if it were?
preferredstock
What is MER in mutual Fund?
1. Management Expense Ratio (MER)The MER is an annual fee that's charged to a mutual fund to pay for such expenses as: * management fees paid to the managers of the fund * adviser sales commissions and ongoing service (trailer) fees * legal and audit fees * custodian and transfer agent fees * fund administration expenses * marketing expenses (guess who pays for all those TV, radio and print ads?) Here is a link with answers on other terms. http://www.bylo.org/affordmf.html
Who fund US?
Anyone who pays federal taxes.
How is common stock different from preferred stock?
Common stocks--a type of stock that pays a variable dividend and gives the holder voting rights. Preferred stocks--a type of stock that pays a fixed dividend and carries no voting rights.
What is difference between equity trading and mutual fund?
Equity trading is when you buy and sell shares yourself, via a stockbroker and hold the shares directly in your name. All dividends paid out by the company in which you hold shares will be paid directly to you. A mutual fund investment is your share (in units) of pooled monies contributed by many investors. These pooled monies are managed by an investment company, which then invests them on behalf of it's unit holders, usually across a selection of publicly listed stocks, bonds, listed property and other financial derivatives ie. you hold these investments indirectly. The units you buy in the mutual fund are in your name, but the investments the fund buys with the pooled monies are held in the fund's name. As the funds assets increase or decrease in value, so will the price of your units held in the mutual fund. The fund usually pays you a distribution of profits at set periods, which can vary greatly in amount from year to year.
What is the difference between provident fund and pension fund?
The difference between a pension fund and provident fund is in how the benefits are paid out. A provident fund pays all he retirement benefits in a lump sum cash benefit at retirement. A pension fund pays one third of the benefit as a lump sum at retirement and the rest is paid out over the lifetime of the beneficiary.
