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IMS Paget Business Prices fall when dividends declared in mutual funds INC The letter read tome the price in a I year end when most mutual fundi Jet died a dividend While mutual fundi have been around in Canada for over year many people within the industry find 11 confusing when share price as led daily in pen in line day even when market was rising or holding steady is why ihey ask question as above lei mutual fund is way a conduit hit you and 1 who in vest in and of fund The professional managers who look after the fund out invcilmenls day by day money have put consider to be the hot possible invest A good portion of monies in an equity fund are invested in Industrie although 1 seen equity funds as much as and better in cash bonds if they fell there would be a poor time in the equity market or the economy own an induslry of it you hope for two things to happen One Ihe industry is profitable and thai profit to it owners in what is called a dividend and hopefully Ihe industry will continue to grow and expand and therefore as an owner through the fund you share in Its increased worth is called a gain An equity mutual fund has part own in dozens Kid in some cases hundreds of industries These industries dec larc period ic a I ly through out year and when they do comes the mutual fund in relationship to Ihe number of shares the fund owns actually you and I as we are owners of the fund When monies arc received by the fund arc added the he fund holds By law the fund must evaluate itself each day by taking all it holdings and assets in re lation to the closing market prices ihit day then divide the total by the number of shares outstanding which produces the net value as found in paper following das Tins is the value all shares arc transacted at be they purchases or redemptions during das It understandable then that if a dividend is received it adds to Ihe value of the funds holdings Even if the ITS YOUR MONEY lapital gams be in our hands Just as you have to pay tax on the interest earned in the bank even you leave the there why mutual fund prices me when a distribution takes place it values don Drive market did mat dividends were f ui And il goes with many of the declaring dividends year and fund adding dends lo their assets which is i fleeted in the daily fund vali Also if the fund managers had bought a slotk at bargain prices and now he market ha moved hose share upwards would sell out and rcaliic a capital gam As an example if they bought a stock per share and now sold it per share ins a realized capital gain bought at and now worth but fee may higher so it is not sold until the higher price is reached This is a capital gam calculated into the daily puces not a real tied capital gain Because dividends and capita gams are taxable the la demands that you and I as owners of fund must pay tax on them Dividends have very little tax for most of us and capital completely uptoSlOOOOO Therefore the fund declares distnbu of those dividends and re capital gains plus any interest earned on it cash reserves in most cases once a year although some funds distributions four times per year When that happens the share price If the funds share had been and the fund declared a distnbu lion of valltesvould decline to What must be the SI in dividends and realized capital gains had been figured mlo ihe daily share prices whenever they received thus helping elevate the funds prices bit by bit as received Nov me is being taken out and paid you and I dividends holders choose automatically reinvested mm shares As a result even though ihaiSIOOOpncc declined to we now have morcsharcs and outvalue in ihe fund is exactly the same All we ON OVER to 90 Main St S Downtown Georgetown Opening Mon May 16 SEE YOU THERE Hours 1 am6 pm Thurs FN am9 pm Saturday am 5 pm For FREE compart ion of a mutual lund 5year GICa prices and Inflation over pail 20 ysara ask for house and wrlla Paul J Regal Financial Centra Union Waterloo Ontario NZJ Dont You Want Your Legs To Look Great This Summer Nows Your Chance To Lose Your BABY FAT Its Back 1 SPECIAL Share With A Friend 3 or LADIES Keep It For Yourself 68 75 EACH MEN 3 Month Membership A TOT SWMMNG LESSONS GEORGETOWN SPA FITNESS CENTRE 8771924 EMtuceiflJMHiSt Mll a