DISTRIBUTIONS THAT ARE NOT EARNINGS

Not everything a fund pays you is an earning. There are times when a fund will give you back your own money. This can happen even if you have not sold any shares.

A return of capital is the return to you of a part of the money you invested in the fund.

Returns of capital may be made to investors because the fund did not earn dividends, and they are not taxed because they are not income.

Before we conclude our look at earnings, we will discuss the option of reinvesting them.