Question : How much do you get from mutual fund dividends?
How does a mutual fund decide how much it will pay out in dividends at the end of the year? Is it based on a percentage of the value gained during the year? Could someone give me a general idea if nothing else?
- asked by Philip L
All Answers:
Answer #1
Mutual Funds are an investment in stocks and bondsby a fund manager for the mutual benefit of theinvestors. The dividends paid are a result of thereturn on the investments (interest and stockdividends) minus the loads and fees charged by thefund and the brokerage. Whatever is left after theexpense is the net dividend. The actual amountvaries based on the performance of the investmentas well as the cost of fees. The cost can varygreatly from one firm to the other.
- answered by jkrd156
Answer #2
Dividends are based off of the companiesperformance.....so if your mutual fund put yourmoney in a company that went down by a 50% rateyour dividend rate would go down 50%So it is basedoff of the value gained during the year.....
- answered by erock 2
Answer #3
It depends on what stocks or bonds are in thefund. Most bonds will only pay a interest rate ofthe banking systems. Low interest rates of oneyear will gain low pay outs. With stocks, if thecompanies pay high dividends then you can gainmore than with low paying companies. The key wordsare growth fund for example. That means the fundis loaded with high dividend stocks. Companiesdecide how much dividends they are going to payshare holders. Some will offer more than others.In mutual funds, the manager could drop one stockfor another, so you can't really calculate. Whatis done is to look at the past years pay outs andget a idea of what to expect from that fund.
- answered by Marla
Answer #4
Your mutual fund shares represent proportionalownership of the stocks held by the fund. Hypothetical situation. Say you buy a mutual fundthat owns only one stock (crazy I know, but bearwith me). Your dividend yield is same as thestock owned by the mutual fund (Yes, fund fees candrag down the yield. But fund fees can come fromdividends or from the sale of stock).For real lifemutual funds, the dividend distribution is simplythe sum of the dividends paid by the stocks ownedin the mutual fund. Note that some mutual fundshave a dividend focus, buying stock in companieswith strong yields.Most mutual funds giveinvestors the opportunity to re-invest dividendsand capital gains distributions. If you chosethis option you won't see any cash. Instead,you'll own more shares of the mutual fund.So theanswer is, it depends. Dividend yields vary basedon the underlying holdings of a mutual fund andits focus on value vs. growth.
- answered by phipsi32
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