Net Investment Income

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DEFINITION of 'Net Investment Income'

Income received from investment assets (before taxes) such as bonds, stocks, mutual funds, loans and other investments (less related expenses). The individual tax rate on net investment income depends on whether it is interest income, dividend income or capital gains.

BREAKING DOWN 'Net Investment Income'

For investment companies, this is the amount of income left after operating expenses are subtracted from total investment income, and it is typically expressed on a per share basis. To find the net investment income per share of a company, divide the net investment income by the shares outstanding. This amount is the amount available to shareholders in the form of dividends.

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RELATED FAQS
  1. What is a permanent portfolio?

    A permanent portfolio is a portfolio construction theory devised by free-market investment analyst Harry Browne in the 198 ... Read Full Answer >>
  2. Are dividends considered passive or ordinary income?

    Despite the fact that earning dividends requires no active participation on the part of the shareholder, they do not meet ... Read Full Answer >>
  3. How do dividends affect net asset value (NAV) in mutual funds?

    Distribution of dividends reduces the net asset value (NAV) of mutual fund shares. However, this doesn't mean that fund investors ... Read Full Answer >>
  4. Are mutual funds considered retirement accounts?

    Unlike a 401(k) or Individual Retirement Account (IRA), mutual funds are not classified as retirement accounts. Employers ... Read Full Answer >>
  5. Do mutual funds invest only in stocks?

    Mutual funds invest in stocks, but certain types also invest in government and corporate bonds. Stocks are subject to the ... Read Full Answer >>
  6. Why are mutual funds not FDIC-insured?

    Mutual funds are not Federal Deposit Insurance Corporation (FDIC)-insured because money invested in funds are not considered ... Read Full Answer >>

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