What Is Return Of Capital (ROC)?

Investors normally care about three main forms of investment income: capital gains, interest income and dividends. When it comes to Exchange Traded Funds (ETFs) and mutual funds, there is a false perception among investors that distributions are purely dividends for equity funds and interest for bond funds, when in fact, most fund providers will state: “Cash distributions consist primarily of income but may, at the Manager’s discretion, include capital gains and/or return of...