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If a fund holds stocks paying dividends and doesn't give a payout, is it necessarily re investing those dividends?
It is not necessary that the mutual fund pays out the dividend. The money would be used to buy more shares of the same stock or of some other stock depending on overall policy goal of the fund and current allocation of funds. This would increase the NAV of the mutual fund and hence its indirectly comes to you once you sell the mutual fund.  The dividend would not be taxable as its not directly paid out.