DEFINITION of 'Ex-Distribution'

A security or investment that is trading without the rights to a specific distribution. When an investment such as a mutual fund or income trust commences trading on an ex-distribution basis, the seller (or the previous owner) rather than the buyer is entitled to receive the distribution. On the ex-distribution date, the security will generally fall by an amount equal to the dollar amount of the distribution.

BREAKING DOWN 'Ex-Distribution'

For example, assume a mutual fund with a net asset value per share (NAVPS) of $10 declares a distribution of 50 cents. On the ex-distribution date, the NAVPS of the fund will be $9.50, since the fund units are now trading without the rights to the distribution. This is similar to the decline in a stock when it commences trading on an ex-dividend basis.

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    A classification of trading shares when a declared dividend belongs ...
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  1. Why don't investors buy stock just before the dividend date and sell right afterwards?

    Many years ago, unscrupulous brokers would use the same logic on their clients as a sleazy sales tactic. These brokers would ... Read Full Answer >>
  2. If I sell my shares before the ex-dividend date will I still get the dividend?

    If you sell before the ex-dividend date you will not receive a dividend from the company. The ex-dividend date is the date ... Read Full Answer >>
  3. How liquid are Vanguard mutual funds?

    The Vanguard mutual fund family is one of the largest and most well-recognized fund family in the financial industry. Its ... Read Full Answer >>
  4. Which mutual funds made money in 2008?

    Out of the 2,800 mutual funds that Morningstar, Inc., the leading provider of independent investment research in North America, ... Read Full Answer >>
  5. Does OptionsHouse have mutual funds?

    OptionsHouse has access to some mutual funds, but it depends on the fund in which the investor is looking to buy shares. ... Read Full Answer >>
  6. Should mutual funds be subject to more regulation?

    Mutual funds, when compared to other types of pooled investments such as hedge funds, have very strict regulations. In fact, ... Read Full Answer >>

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