FYI:
A mutual fund split operates very much like a stock split, except it is far less common and has no impact on the fund’s value. A split occurs when a mutual fund boosts the number of shares outstanding while simultaneously lowering the price per share by the same magnitude. A mutual fund’s price is also called the net asset value (NAV) per share. This indicator represents the total value of the portfolio, less liabilities, divided by the number of shares outstanding.
Be sure to read about adjusted NAV here.
Like stock splits, mutual fund splits are expressed as a ratio, such as 2:1 or 4:1. In a 4:1 split, the number of shares outstanding is quadrupled and the price per share is reduced to a quarter of its value.
To illustrate, imagine that you own 100 shares of a mutual fund at a NAV price of $40 per share. After the fund undergoes a 4:1 split, you now own 400 shares at a NAV price of $10 per share. In both cases, the value of your shares is $4,000. To account for the cost basis after the split, you would need to increase your position by the split rate (i.e., 4:1) and maintain your original total cost and holding period. You would also need to decrease your per-share costs by the magnitude of the split.
Regards,
Ted
http://mutualfunds.com/education/what-happens-when-mutual-funds-split/
