The net asset value for the (FHLSX) Invesco Health Sciences fund is close to $60. Do mutual funds ever consider stock splits? Are they even an option with mutual funds? -- Michael Micciche Michael, You could call a share split, like a name change, a cosmetic surgery procedure for the mutual fund industry. Share splits can and do happen in the world of mutual funds. But they don't occur very often and are virtually meaningless exercises for shareholders. A share split has no economic effect on a fund's shares. It just doubles, triples or quadruples the number of shares, thereby lowering the net asset value, or NAV. A fund's NAV, the dollar value of a single share, is based on the value of all the fund's holdings divided by the number of shares outstanding. By increasing the number of shares, a firm lowers a fund's NAV. When a publicly traded company splits its stock, the maneuver may produce a spike in the stock's price if the market views it as a positive signal by the company. But the market does not directly influence the pricing of a mutual fund's NAV. If your fund completes a 2-for-1 split of its shares, you might wind up with double the number of shares. But your account's value will not change, and there aren't any tax implications. "The only reason to do a share split is for marketing purposes," says Pamela Wilson, a senior partner at Hale and Dorr in Boston. For example, a fund with a rather lofty NAV may be off-putting to investors, particularly novice mutual fund shoppers. An abnormally high NAV may make some investors uncomfortable. In the eyes of some, lofty NAV equals expensive. A share split will simply render a more palatable, digestible number, says Wilson. That's why you will see many new funds launch at a starting NAV of about $10. A fund company might split a fund's shares if its NAV is higher than those for the rest of the family, making for easier comparisons. Wilson says she sees it happen when a fund company wants to reduce the high NAV on an older fund to bring it in line with a group of new funds. Here's a real-world example. In late 1997, AIM Management split the shares of five funds the firm had inherited from its sister company Invesco earlier that year. The five Invesco funds had been around for a long time, and all had NAVs of $60 or more, says an AIM spokesman. Fund shareholders received three additional shares for every share they owned in one of the funds. The lower, more familiar NAVs made the funds easier to market and were more in line with the other AIM funds, the spokesman says. By the way, Invesco says it has no plans to split the shares of the Health Sciences fund. When it comes down to it, the only thing that really matters is how much money you make in the fund and how little you have to give up to taxes. Send your questions to firstname.lastname@example.org , and please include your full name.