Saturday, December 25, 2010

Capital Gain Distribution

Some managed funds, such as mutual funds, distribute profits to shareholders from the sale of securities held in the fund's portfolio. Other funds such as ETF's generally do not make such distributions, but may pay dividends - either passing through dividends they receive from other companies, or paying dividends out of profits from capital gains. Capital gain distributions may have income tax implications, and will also impact on investor plans (e.g. to reinvest or not), thus a trained and experienced financial adviser can be helpful.

Synonyms: Distributions
 
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