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Do Mutual Fund and/or ETF's shares split like stocks?


Do Mutual Fund and/or ETF's shares split like stocks?

There are two answers to this, yes and no.

Generally the answer is no because they are required by law to distribute 90% of earnings to shareholders. This reduces the Net Asset Value. Doing a split in that circumstance makes no sense.

However, there are always exceptions. Mutual funds contained within certain annuity or certain retirement products may not distribute cash to their shareholder due to tax rules and they will make unit adjustments, the equivalent of a split, to keep them in compliance with the various regulatory authorities. So the answer is "usually no," but in certain highly defined circumstances "yes." However as splits do not add any value to shareholders, indeed, to an extent they actually reduce shareholder value since they create costs, it doesn't matter anyway.

It really doesn't matter because it's like getting two nickels for a dime. No gain or loss on the deal.

No they don't. Mutual Funds and ETF's are baskets of funds so it really makes no sense to split them.

Mutual Fund shares can split and even reverse split. I have seen it many time. Please read my profile.

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