Question :
What are dividends and capital gains?

Answer :
A dividend is a sum of money an investment fund or company pays to its shareholders, typically from its profits. The amount is usually expressed on a per-share basis.

A capital gain is an increase in the value of an investment, calculated by the difference between the net purchase price and the net sale price. When investment companies buy and sell shares of stock within a pooled investment (e.g., mutual fund, common trust fund, etc.), a gain or loss is experienced based on the difference between the purchase and sale price.

Dividends and capital gains are added to the overall value of the investment and are reflected as an increase in the investment’s daily unitized price. You will not see an explicit dividend or capital gain activity on your account statement.