By Scott Ronalds

The year-end distributions for all our funds (with the exception of the Savings Fund) will be declared on December 15th and paid on December 16th. The Savings Fund will pay its regularly-scheduled monthly distribution on December 31st.

As a reminder, distributions represent the mechanism whereby mutual funds transfer to unitholders any interest and dividend income and realized capital gains they have accrued over the course of the year. Most investors choose to re-invest distributions into additional fund units, but clients can also opt to receive them in cash.

Remember that immediately following a distribution, the price of a fund drops by an amount equivalent to the payment. However, you will receive additional units in the fund which are equivalent in value to the amount of the distribution. The end result is that the value of your investment doesn’t change, but you own more units in the fund at a lower unit price.

For example, assume you own 100 units in a fund that is valued at $10.00/unit (your investment is worth $1,000). If the fund pays a distribution of $0.10/unit, its price will drop to $9.90 following the distribution. However, if you follow the common practice of re-investing your distributions, you will receive an additional 1.01 units in the fund ($0.10/$9.90), so the value of your investment remains unchanged (101.01 units x $9.90/unit = $1,000).

The estimated distributions for our funds are as follows:

  • Income Fund: $0.19/unit
  • Equity Fund: $0.05/unit
  • Global Equity Fund: $0.06/unit
  • Small-Cap Equity Fund: $0.95/unit

Please note that these are only estimates and are subject to change.

Important: The estimated distribution for the Small-Cap Equity Fund is higher than normal, as the fund generated more capital gains than in previous years. The amount may be reduced in the coming weeks, but investors considering purchasing additional units in the fund in non-registered accounts may wish to delay any purchases until after the distribution has been declared on December 15th.

If you have any questions about distributions, feel free to give us a call at 1-888-888-3147.