If I am invested in a mutual fund, and I expect that another fund will get more dividend distribution during?

period x, should I switch to the mutual that will get the higher payout of dividends especially if it does not cost me anything to switch?

sure...if you're not in a IRA or qualified plan....go ahead and get that dividend. You get taxed on a distribution without getting the appreciation involved in it's run up! Not smart!!!

A dividend in a mutual fund decreases it's market value. If the dividend is not used to repurchase shares then you are left with the same number of shares, a lower NAV, and a tax bill. If you aren't in an IRA or qualified plan and you are in a dividend repurchase fund then you get more shares, lower NAV (resulting in no market value change), and a tax bill.

bottom line...when it comes to mutual funds, stick to your long term plan and avoid chasing the dividends...they don't help you.

I would not switch. A mutual fund is not meant to be a short-term flip from one fund to another. I don't know what type of fund you are in, but I imagine there are many ways that trying to boost returns by swapping between funds will not work out.

The question you should ask yourself is......Does the fund's objective that I am currently invested in match with my personal investment objectives?. Some funds are designed to provide higher dividends and capital pay outs for those who are seeking income, while others are more tax conscious and tend to be managed to limit the investors tax obligation. It sounds like you may be in the wrong type of fund for your personal objectives.

If the dividends are taxed, it is much better to have the mutual fund that does not pay so much dividends. That way you will pay less taxes and keep more for yourself.