Fidelity Account "Activity & Orders" Question

Investing
#1

Each month my bank automatically sends money to contribute to my individual Fidelity account (non retirement).

This is the activity I typically see:

Electronic Funds Transfer Received (Cash)
You bought periodic investment Fidelity Freedom Index 2060 investor (FDKLX) (Cash)

I noticed a different order get made in May and was wondering if this can be explained to me.

Long-Term CAP Gain Fidelity Freedom Index 2060 Investor (FDKLX) (Cash)
Reinvestment Fidelity Freedom Index 2060 Investor (FDKLX) (Cash)

Are these Dividends and they are getting reinvested?

Thanks!
Renee

#2

Yep… those two line items have nothing to do with your automated investment. That’s actually the investment itself generating a cash payment to you, then immediately using that cash to buy more of the same fund. That is indeed the act of “reinvesting the dividends”.

These types of payments are broken down into “dividends” and “capital gains distributions”. They basically mean the same thing to you, although they might appear on a different line item on your tax form and receive slightly different tax treatment in a non-retirement account.

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