In-kind distribution

A fund distributing assets, such as securities, to investors instead of first converting them into cash. The recipient then holds the assets and bears the associated rights, risks and restrictions.

In-kind distribution in practice

Hypothetical: a fund distributes shares to an investor rather than selling them and distributing cash. The investor must decide whether and when to hold or sell, subject to restrictions and tax considerations. Avoiding a sale at distribution does not guarantee no later price impact, and tax outcomes depend on the investor and jurisdiction.

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