FYI: Although in-kind redemptions aren’t nearly as common for mutual funds as they are for other pooled investment products like exchange-traded funds (ETFs), understanding how they operate is critical for investors exploring the various options for cashing out their securities. When it comes to profiting from your investments, it’s important to know this piece of information before investing.
Simply put, an in-kind redemption is a type of payment that is made in securities or in another format as opposed to cash. Redemptions are paid in-kind for various reasons, chief among them being to minimize tax liabilities for both redeeming and non-redeeming shareholders and to ensure that funds don’t have more outflow than inflow.
Regards,
Ted
http://mutualfunds.com/education/what-is-an-in-kind-redemption-for-mutual-funds/
