Ex-Distribution

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.
 

RELATED TERMS
  1. Record Date

    The cut-off date established by a company in order to determine ...
  2. Declaration Date

    1. The date on which the next dividend payment is announced by ...
  3. Ex-Date

    The date on or after which a security is traded without a previously ...
  4. Cum Dividend

    When a buyer of a security is entitled to receive a dividend ...
  5. A classification of trading shares when a declared dividend belongs ...
  6. Net Asset Value - NAV

    A mutual fund's price per share or exchange-traded fund's (ETF) ...
Related Articles
  1. Investing Basics

    Dissecting Declarations, Ex-Dividends And Record Dates

    Understanding the dates of the dividend payout process can be tricky. We clear up the confusion.
  2. Investing Basics

    Dividend Facts You May Not Know

    Discover the issues that complicate these payouts for investors.
  3. Options & Futures

    Dividends, Interest Rates And Their Effect On Stock Options

    Learn how analyzing these variables are crucial to knowing when to exercise early.
  4. Investing

    Make Ex-Dividends Work For You

    Find out how to keep your dividends out of the tax man's hands.
  5. Mutual Funds & ETFs

    The 3 Best American Funds for the Income Seeker in 2016

    Learn about American Funds' mutual fund offerings, their past performance compared to peers and three American funds to consider for income investors.
  6. Mutual Funds & ETFs

    5 Low Fee Lord Abbett Mutual Funds

    Learn about five low expense ratio Lord Abbett mutual funds and the key characteristics about each mutual fund's top holdings, returns and total assets.
  7. Products and Investments

    There's a Reason They're Called Junk Bonds

    The closing of Third Avenue Managemet's Focused Credit Fund is a warning to investors and advisors. Beware the junk.
  8. Mutual Funds & ETFs

    Top 3 PIMCO Funds for Retirement Diversification in 2016

    Explore analyses of the top three PIMCO funds for 2016 and learn how these funds can be used to create a diversified retirement portfolio.
  9. Mutual Funds & ETFs

    The 3 Best Downside Protection Equity Mutual Funds

    Learn how it is possible to profit in a bear market by owning the correct selection of mutual funds that provide downside protection and opportunity.
  10. Mutual Funds & ETFs

    The 4 Best Lord Abbett Mutual Funds

    Discover the four best mutual funds administered and managed by Lord, Abbett & Co., LLC that offer investors a wide variety of investment strategies.
RELATED FAQS
  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. Are target-date retirement funds good investments?

    The main benefit of target-date retirement funds is convenience. If you really don't want to bother with your retirement ... Read Full Answer >>
  4. Do mutual funds require a demat account?

    A dematerialized account enables electronic transfer of funds. The account is used so an investor does not need to hold the ... Read Full Answer >>
  5. 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 >>
  6. 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 >>
Hot Definitions
  1. Presidential Election Cycle (Theory)

    A theory developed by Yale Hirsch that states that U.S. stock markets are weakest in the year following the election of a ...
  2. Super Bowl Indicator

    An indicator based on the belief that a Super Bowl win for a team from the old AFL (AFC division) foretells a decline in ...
  3. Flight To Quality

    The action of investors moving their capital away from riskier investments to the safest possible investment vehicles. This ...
  4. Discouraged Worker

    A person who is eligible for employment and is able to work, but is currently unemployed and has not attempted to find employment ...
  5. Ponzimonium

    After Bernard Madoff's $65 billion Ponzi scheme was revealed, many new (smaller-scale) Ponzi schemers became exposed. Ponzimonium ...
  6. Quarterly Earnings Report

    A quarterly filing made by public companies to report their performance. Included in earnings reports are items such as net ...
Trading Center