Dilution, dilution levy or dilution adjustment

For funds that are single-priced rather than dual-priced, dilution is the reduction of value suffered by a fund as a result of transacting, due to the fact that assets are purchased at offer price (or sold at the bid price) and valued at mid price.

Dilution levy or dilution adjustments can be implemented by a fund manager on large deals to reduce or eliminate the dilution impact for other investors.

Back to