RE:Question for YBR or othersSafetrader wrote: However if I wanted to add some in non-registered account LBS has 85% ROC versus DFN 15% ROC. it would be pretty different and probably better with LBS. How come Fed taxation don't have them put same % since they are same type of split shares? It seems like they can choose...Is it the case?
As far as I understand, it has to do with how much dividends are collected by the fund and how much is paid out. DFN has a consistently higher NAV than LBS and that suggests a higher dividend income for the fund and the Class A are partly funded by dividends.
As far as accounting goes, they would pay out of dividends, then capital gains, then ROC. If the capital gains are not yet realized, from an accounting perspective the distribution would then be ROC, so it depends on when capital gains are realized. A fund with a lower NAV will dip into ROC sooner. There could also be some other accounting measures i.e. treatment of written options and currrently open positions that could lead to classification of ROC rather than capital gains.
There could be some element of choice on their part, depending on how various amounts are classified. Perhaps there is a difference depending on if they use cash flow or accrual accounting, maybe someone else here knows.