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Do mutual funds split?



Our response:

While an individual stock may decide to conduct a stock split  this rarely occurs with a mutual fund. With stocks, this may be done in an effort to help increase the appeal of a stock on a per share basis, so that a person can more easily purchase a share (instead of shares being $300 each, if the stock undergoes a 3:1 split, one share is more affordable at $100 each). However, this is not a relevant consideration with mutual funds because fractional units may be purchased. With mutual funds, an investor does not purchase a certain number of shares but rather invests a certain dollar amount, such as $100 or $1000, and receives a proportionate NAV of the fund. Please note that minimum initial purchase amounts may apply to certain mutual funds.

However, exchange traded funds (ETFs) which are traded on a stock exchange require the purchase of non-fractional units so splits may occur.

Learn more about mutual funds and ETFs on Speak to a registered financial representative for advice that fits your personal and financial circumstances.

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