Distributions

Mutual funds are required to pass through to their shareholders substantially all of the interest income and capital gains earned by the fund during the year. These distributions are paid on a regular schedule as shown in the table below.

Shareholders may elect to have their share of fund distributions paid in cash or reinvested in their account. For any IRA accounts you own, Homestead Funds requires that you be at least age 59½ in order to receive distributions in cash.

For investors in regular, taxable accounts, these amounts are generally taxable to you in the year they are declared, whether paid in cash or reinvested. We issue IRS Form 1099 at the end of January. This form reports your share of any income or capital gains earned by the fund during the prior tax year.

Distribution Schedule
INCOMECAPITAL GAINS
Daily Income FundDeclared daily and paid monthlyFor all funds, if there is a capital gain, the distribution is declared and paid annually at year-end or more frequently, if necessary.
Short-Term Gov. Securities FundDeclared daily and paid monthly
Short-Term Bond FundDeclared daily and paid monthly
Intermediate Bond FundDeclared daily and paid monthly
Stock Index FundDeclared and paid annually
Value FundDeclared and paid semiannually
Growth FundDeclared and paid annually
International Equity Fund Declared and paid annually
Small-Company Stock Fund Declared and paid annually
Year-to-Date Distributions

For all Homestead Funds, the distribution of capital gains — any profit the fund earned on the sale of underlying portfolio securities — is typically made in mid-December based on transaction activity through mid-October. Any gains attributable to trading activity in the final two months of the year will be distributed and taxable to shareholders in the following year. Also at year-end, the funds pass through their final distributions of dividend or interest income.

Year-End Distributions

For all Homestead Funds, the distribution of capital gains — any profit the fund earned on the sale of underlying portfolio securities — is typically made in mid-December based on transaction activity through mid-October. Any gains attributable to trading activity in the final two months of the year will be distributed and taxable to shareholders in the following year. Also at year-end, the funds pass through their final distributions of dividend or interest income.

Estimated Year-End Distributions

We calculate estimates of year-end distributions and make this information available on the website beginning in mid-November.

Having an estimate of the year-end distribution is useful for those considering purchasing fund shares late in the year. If a significant income or capital gains distribution is anticipated, investors in regular, taxable accounts may want to delay their purchase until after the record date to avoid having to pay income tax on the distribution. It can also be a help for current shareholders with regular, taxable accounts who want to get a jump on their tax planning.