Vanguard fund vtovx fell over 3 percent yesterday??

[dpeters3]

Hi, I'm new on this board and don't have alot of fund knowledge, but I have Vanguard fund VTOVX in my portfolio and was wondering........Why the change in price yesterday? The funds make up doesn't warrant a 3.00 percent drop in a single day. I have not seen it drop this much in over a year. Any advise appreciated.
Pete

[Dawg52]

Check it tomorrow.

[grumpy]

Most likely there was a dividend or capital gain distribution. When that happens the NAV decreases by the amount of the distribution.

Grumpy

[dpeters3]

I'm confused because of my ignorance. I didn't realize dividends and capitol gains were subtracted from the funds value? Lets see.....my value dropped 3% in which as an example lost $3000, but gained say $3,000 in dividends and capitol gains. Aren't they robbing Peter to Paul? Is that the way it works?

[Rich_in_Tampa]

Quote:

Originally Posted by dpeters3 I'm confused because of my ignorance. I didn't realize dividends and capitol gains were subtracted from the funds value? Lets see.....my value dropped 3% in which as an example lost $3000, but gained say $3,000 in dividends and capitol gains. Aren't they robbing Peter to Paul? Is that the way it works?

Assuming you reinvest your dividends, within hours they will be used to purchase new shares at the slightly lower price. Share price x number of shares = NAV = same as before the distributions. Not to worry, you will be whole.

[Ed_The_Gypsy]

Mutual funds are required to distribute capital gains and dividends every year. The NAV does drop by the amount of the distribution. The taxability of distributions can be offset by losses which I think can be carried over from earlier years.

[Donzo]

Vanguard 2015 was way down yesterday also.....but I had several hundred new shares -
Man what a great last half of a year! Truly an excuse to celebrate -
but that does'nt take much...for me!

[audreyh1]

GROAN :

Sorry, it's just that I am always surprised by people not understanding mutual fund distributions.

There are a lot more NAV drop panic posts over on the morningstar forum, so you're in good company.

Audrey

[2B]

Quote:

Originally Posted by audreyh1 GROAN : Sorry, it's just that I am always surprised by people not understanding mutual fund distributions. There are a lot more NAV drop panic posts over on the morningstar forum, so you're in good company. Audrey

I've been in the rodeo a few times on this issue and I can't help checking the mutual fund website when the big hit occurs. Just yesterday I had a mild panic attach and checked the Dodge & Cox site.

I know what happened but I still have to check to make myself feel better.

[audreyh1]

I guess I look at the ex-dividend dates for my mutual funds BEFORE they occur, because I'm already anticipating the tax hit from distributions.

And I want to make sure that I have the right funds reinvesting dividends, and the right ones paying them out (for rebalancing purposes).

So I am expecting the NAV hit.

Audrey