Distribution Reinvestment

AAA

DEFINITION of 'Distribution Reinvestment'

A process whereby the distribution from a limited partnership, real estate investment trust (REIT) or other pooled investment is automatically reinvested into common units or shares in a fund, often at a discount to the current market price. Investors can set up distribution reinvestment plans with the partnership itself, or with a broker through which the units are held.

Also known as a DRIP, but not to be confused with dividend reinvestment plans (also called DRIPs), which are found in many large-cap stocks and mutual funds. Most distributions are done quarterly, but some may occur on a monthly basis.

INVESTOPEDIA EXPLAINS 'Distribution Reinvestment'

Investors who participate in these programs also generally have commissions and other fees waived, making it an advantageous and affordable way to grow their investment. Meanwhile, the financial managers have a stable way to grow assets with current investors.

RELATED TERMS
  1. Dividend Reinvestment Plan - DRIP

    A plan offered by a corporation that allows investors to reinvest ...
  2. Real Estate Investment Trust - ...

    A security that sells like a stock on the major exchanges and ...
  3. Limited Partnership - LP

    Two or more partners united to conduct a business jointly, and ...
  4. Unit Investment Trust - UIT

    An investment company that offers a fixed, unmanaged portfolio, ...
  5. Stock Dividend

    A dividend payment made in the form of additional shares, rather ...
  6. Automatic Reinvestment Plan

    An investment program in which capital gains or other income ...
Related Articles
  1. Fundamental Analysis

    The Perks Of Dividend Reinvestment Plans

    These plans offer shareholders a way to directly invest in some of the top companies without the commissions.
  2. Retirement

    Discover Master Limited Partnerships

    These unique investments provide significant tax advantages.
  3. Investing

    Build A Dividend Portfolio That Grows With You

    Balance risk and return to produce adequate income despite inflation.
  4. Options & Futures

    How Much To Save To Become A Millionaire

    With a little discipline and the help of some powerful savings vehicles, anyone can hit this mark.
  5. Personal Finance

    Why These Could Be 2015's 10 Best REITs

    If you want to get on the REIT money train, then you better hurry up. However, the REITs covered here have potential beyond 2015.
  6. Personal Finance

    How To Buy A Beach Condo In The Philippines

    Foreigners can't buy land in the Philippines – but they can buy condos. Here's how to get one at the beach.
  7. Credit & Loans

    Is Now the Right Time to Buy a House?

    Thinking of buying a home? Consider these factors first.
  8. Professionals

    Should Investors Nix Actively Managed Funds?

    Index fund returns are on a tear but does this mean investors should nix actively managed funds?
  9. Personal Finance

    Manhattan Luxury Condos As Investments

    New York City real estate is a trending investment for foreign investors.
  10. Investing

    Eyeing REITs? Consider these Risks

    REITs are a great way to invest in real estate without all the drama and headaches. That said, there are risks.

You May Also Like

Hot Definitions
  1. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
  2. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
  3. Market Value

    The price an asset would fetch in the marketplace. Market value is also commonly used to refer to the market capitalization ...
  4. Preference Shares

    Company stock with dividends that are paid to shareholders before common stock dividends are paid out. In the event of a ...
  5. Accrued Interest

    1. A term used to describe an accrual accounting method when interest that is either payable or receivable has been recognized, ...
  6. Absorption Costing

    A managerial accounting cost method of expensing all costs associated with manufacturing a particular product. Absorption ...
Trading Center