Reinvestment Options for Mutual Funds
There are two options for dividends reinvestment when entering a buy order for a mutual fund: payout or reinvest.
Payout will allow mutual fund distributions to be paid in cash to your Scottrade account. Reinvest automatically makes a purchase equal to the amount of the distribution, increasing the number of mutual fund shares you own.
Be aware, some fund companies may have fees associated with this action. Please check the fund prospectus for details.
Funds are required to distribute any gains realized from the sale of securities at least once a year. If and when capital gains are realized through sale of securities, they will be distributed to shareholders as taxable capital gains.
With Payout, the money distributed from the Capital Gains is placed in the Cash portion of your account. You may choose to have a check sent to you at any time. Scottrade does not charge a fee if you choose to pay out.
With Reinvest, the money distributed from the Capital Gain will be reinvested in the same mutual fund. Scottrade does not charge a fee for reinvesting Capital Gains.
Investors should consider the investment objectives, risks, charges, and expenses of mutual fund carefully before investing. A prospectus contains this and other information about the fund and is available through www.scottrade.com or through a Scottrade branch office. The prospectus should be read carefully before investing.