Reinvestment Privilege

Reinvestment Privilege In some cases, a mutual fund will gives its investors the chance to purchase additional shares of the fund without having to pay the sales charge that normally goes along with it. The purpose of this is to help convince people who have made some money from their investments to put it back into the mutual fund to help it grow even further. Both income and capital gains can be used for this reinvestment and the lack of a sales charge is to encourage this additional investment, as this is the best thing for the mutual fund as a whole.