[happy_guy]

Hello,

I have a TFSA with TD on which I invested $2500 in each of the 4 classic e-series index funds following the couch-potato strategy. To this day, the book values on 3 of the funds remained as $2500 each except for that of the Canadian Bond Index fund. It changed to $2505 for some reason.

Does it have anything to do with inflation?

I used to think that the book value will change only if I invest more or if the return is re-invested. Please explain why the book value on the bond-fund changed like that.



----- happy_guy

 

[Thal81]

Well you should go read up on what is the book value of funds and how it will change when you buy/sell. Short answer is it would be used to calculate your capital gains if it was in a taxable account. You're in a TFSA so the book value doesn't matter.

As to why your bond bund has $2505, that's because you had a distribution at the end of November (interests payment) and you chose the option to automatically re-invest distributions, which means buying new units of the fund, so that increases the book value. Click on the fund and check the transaction history, you'll see what I'm talking about.

 

[happy_guy]

Well you should go read up on what is the book value of funds and how it will change when you buy/sell. Short answer is it would be used to calculate your capital gains if it was in a taxable account. You're in a TFSA so the book value doesn't matter.

As to why your bond bund has $2505, that's because you had a distribution at the end of November (interests payment) and you chose the option to automatically re-invest distributions, which means buying new units of the fund, so that increases the book value. Click on the fund and check the transaction history, you'll see what I'm talking about.

Oh, thanks. That's great. So, bond distribution is more frequent than that of an equity fund, it seems.