What is ex-distribution?

• A. The date on which a fund announces its distributions.
• B. The date after which a fund's price no longer includes the most recent distribution; the price typically falls by the distribution amount.
• C. The date on which a fund pays its management fee.
• D. The date the fund becomes eligible for tax credits.

Answer: (B)

Ex-distribution is the date on which a fund’s price stops reflecting the value of its most recent distribution. After this date, the fund’s net asset value (NAV) typically falls by roughly the amount of the distribution. This timing determines who is entitled to the payout: if you own the fund before the ex-distribution date, you receive the distribution; if you buy on or after that date, you do not. The price drop on the ex-distribution date transfers value from the fund to the payout, keeping the overall value consistent for the market. This concept is distinct from the declaration date (when the distribution is announced), the payment date (when cash is paid), or tax-credit implications, which are not what ex-distribution describes.