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Generally, equity mutual funds declare distributions quarterly or annually. These distributions include income and/or capital gains (short and/or long-term). By law,
mutual funds must distribute realized capital gains and income at least annually. However, if a fund's Board of Trustees believes it's necessary, interim distributions
can be made as well.
Important dates in the distribution process:
- Record Date
- If you own shares in the Fund on this day, you will receive the distribution. The total amount of a distribution is determined by the number of shares held
on the Record Date multiplied by the distribution dollar amount per share.
- Ex-Dividend Date
- Distributions are made from the Fund on this day. In turn, the Fund's share price drops by the amount of the distribution (plus or minus any market activity on this day).
- Reinvestment/Payable Date
- For those who elect to reinvest distributions, additional shares are purchased on this day. The number of shares purchased equals the total distribution proceeds
divided by the Fund's share price on the Ex-Dividend Date. Shareholders who choose to receive distributions in cash will be mailed the distribution on this date.
The Oakmark Funds determines the total distribution amount for each fund by adding the following:
- Income Dividend
- Short-Term Capital Gains
- Long-Term Capital Gains
Income Dividend | Tax Information
Mutual funds can earn dividends, interest, and other investment income on the securities in which they invest. A fund subtracts its expenses from this investment income, and it distributes the remainder to its shareholders as income dividend.
Capital Gains
In addition to income dividends, mutual funds also distribute capital gains. When a fund makes a profit from selling securities, it passes that profit on to you as capital gains. Capital gains can be classified as short term or long term.
Short-Term Capital Gains are the profits that occur from selling shares that have been held for one year or less.
Long-Term Capital Gains are the profits that occur from selling shares that have been held by the fund for more than a year.
For funds that invest in foreign securities, there will also be an amount for Foreign Tax Credit. Mutual funds are allowed to pass taxes paid to foreign governments through to their shareholders.
On their tax returns, shareholders can either deduct foreign taxes from their income or use foreign taxes as credit against U.S. taxes owed.
Check out the Mutual Fund Tax Center for more information.
Please note:
- Whether you take distributions in cash or reinvest them, they are still subject to tax in the year they occur.
- Representatives of The Oakmark Funds are available for your questions about our funds' distributions. However, they may not provide tax advice. If you require individual tax advice, please consult your accountant or tax advisor.
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