Distribution Reinvestment
A process whereby the distribution from a limited partnership, real estate investment trust (REIT) or other pooled investment is automatically reinvested into common units or shares in a fund, often at a discount to the current market price. Investors can set up distribution reinvestment plans with the partnership itself, or with a broker through which the units are held.
Also known as a DRIP, but not to be confused with dividend reinvestment plans (also called DRIPs), which are found in many large-cap stocks and mutual funds. Most distributions are done quarterly, but some may occur on a monthly basis. Investopedia Says:
Investors who participate in these programs also generally have commissions and other fees waived, making it an advantageous and affordable way to grow their investment. Meanwhile, the financial managers have a stable way to grow assets with current investors. Related Terms:
Automatic Reinvestment Plan
Dividend Reinvestment Plan - DRIP
Limited Partnership - LP
Real Estate Investment Trust - REIT
Stock Dividend
Unit Investment Trust - UIT |