bilperk:

Hi Lili,

When a fund makes a distribution, be it CGs or dividends, it lowers the NAV by the same amount.  If you reinvest it all, then you buy more shares in the same amount as the distribution.  It doesn't matter how the dividends accrue.

best,

Bill

Hi Bill - that isn't true of CAIBX.  The NAV does not drop when the dividend distributions happen, only when the cap gains distrubtions happen.  You don't get the entire dividend distribution for the quarter if you haven't been in the fund for the full quarter.  So for instance, if you buy the fund 2 days before the dividend distribution, you only get 2 days worth, not the entire quarter's worth of dividends.

See the footnote in the below link, which states "The share prices of all of our equity funds, except Capital Income Builder and The Income Fund of America, decrease when a dividend is paid."

http://www.americanfunds.com/funds/returns/alphabetically.htm