Knowledge...
Investing Fundamentals
What is a managed investment?
4 Asset classes
Choosing the right investment
Risk & return
Diversification
Distributions
Tips for investing
Choose a financial adviser
Learn the secret to wealth
Define investment goals
Budget to invest
Get Started
Glossary
Common questions
Need financial advice?
Calculators

Distributions

At certain times in a year (usually on a quarterly basis), as an investor in a managed investment you may receive a distribution of income.

Income is the money each fund makes through its investments. Income can include dividends from shares, interest payments from fixed interest investments as well as profits from the sale of investments in the funds.

For various reasons not all BT funds distribute 1.

BT Investment Funds (Australian dollar unit trust)
Most funds in this product have the capacity to distribute quarterly.

Keeping an eye on unit prices - before and after distributions

An important thing to note about the structure of managed investments is the relationship between unit prices and distributions.

As an investor you may notice that the unit price of your fund falls just after a distribution.

Profits and income received by a fund are included in a fund's unit price and accrue until the end of the quarter. When a distribution occurs, the accrued profits and income are paid to investors. Consequently, the unit price will tend to fall by approximately the same amount as the distribution. This means that if you were to invest at the end of a quarter immediately prior to a distribution some of your investment capital may be immediately converted into a distribution of income.

You will see in the chart that the unit price of the fund fell directly after the end of the quarter, and then continued to grow.

All figures for funds under the BT Investment Funds are in Australian dollars. Exchange rate fluctuations between the Australian dollar and the New Zealand dollar affect the New Zealand dollar value of the return for New Zealand investors.

Options for receiving your distribution

You can choose to have your distribution paid to your bank account, paid by cheque, or reinvested.

If you choose to reinvest your distribution, generally no fees are applied. Reinvesting your distribution can make a significant difference to the return of your investment due to the effect of compounding.

1. Distributions and fund performance are not guaranteed.

back to top