Series 66: Automatic Reinvestment

Taken from our Series 66 - NASAA Uniform Combined State Law Exam

Definition of the term Automatic Reinvestment ...

a mutual fund practice in which an investor’s profits are automatically used to purchase more fund shares. Automatic reinvestment occurs at the NAV and does not incur sales charges, saving the investor money; however, reinvested dividends, income, and capital gains are still subject to taxation.

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