A few weeks back, Scott Francis looked at the pros and cons of utilising a dividend reinvestment plan. In his latest Article written for Alan Kohler's Eureka Report, Scott looks at the distributions from managed funds and asks whether investors should be reinvesting these distributions.
He comments that the issue of managed fund re-investments plans is much more vexed because there are some serious tax inefficiencies built into managed funds.
In automatically reinvesting your managed fund distributions - especially at the wrong time of the year - you can pay heavily for the apparent ease of the reinvestment facility.
Click on the following link to read Scott's article - When it pays to reinvest