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Page 16 · column 1 of 4 · from the scan, no model involved
Funds
From Page 3
First, a fund may receive income in the form of dividends and interest on the securities it owns. A fund will pay its shareholders nearly all of the income it has earned in the form of dividends.
' Second, the price of the securities a fund owns may increase.
When a fund sells a security that has increased in price, the fund has a capital gain.
At the end of the year, most funds distribute these capital gains (minus any capital losses) to investors.
Third, if a fund does not sell but holds on to securities that have increased in price, the value of its shares (NAV) increases.
The higher NAV reflects the higher value of your investment. If an investor sells shares, they make a profit (this also is a capital gain).
Usually funds will give investors a choice — the fund can send payment for distributions and dividends, or the investor can have them reinvested in the fund to buy more shares, often without paying an additional sales load.
93.9%