Heads up: Azzad Funds distribution will occur next week
On Wednesday, December 19, the Azzad Funds will make a capital gains distribution to all fund shareholders. This will mean the net asset value (NAV) — sometimes called the share price — will be lower on Wednesday than it will have been when the market closed on Tuesday, December 18. But this NAV drop doesn’t mean that the funds lost money because of this event, so there’s no need to worry. Pooled investments like mutual funds are supposed to work this way. When a mutual fund realizes capital gains, such as from stock dividends or from selling holdings that had increased in value, the fund must distribute those gains periodically among all fund shareholders. If you own shares in a mutual fund, you will receive a portion of those gains for each share of the fund you own. When a distribution occurs, a fund’s share price drops by the per-share amount of the distribution. If you’re like most Azzad Funds shareholders and you have elected to reinvest your investment gains in additional shares, you just got more shares of the fund. Why does this happen? Mutual funds are required to work this way to qualify for special tax rules available for