A payment made out of a fund to its holders
A distribution is a regular payment from a fund. Unlike a company dividend it can be paid out of capital when returns are poor, and the unit price drops by the amount paid. Choosing to reinvest instead of receiving it puts compounding to work. Monthly payouts suit someone spending the money, which is a different aim from growing it.
A fund priced at $10,000 that pays a $500 distribution is priced at $9,500 afterwards.
For learning, not investment advice. Decisions are your own.
StockFit · TrueNorthLabs Inc.