Almost all US stock mutual funds pay out the dividends received over the year in a lump sum annually, or in some cases, semi-annually or quarterly. Bond mutual funds (and money market funds) usually pay out the interest payments from the bonds or promissory notes that they hold each month, and these payments are also called dividends (and reported as dividends on the investor's US tax returns). There is usually a provision for those who choose to reinvest such dividends back into the mutual fund: the mutual fund issues more mutual fund shares to the investor who chooses the re-investment option, and in the case of load funds, the mutual fund might not charge the load on the re-investment (but will definitely charge the load if you take the dividend in cash and send it back the next day as a new investment).
In the US, all dividends (and capital gains) that are not distributed to the investor are income to the mutual fund and the fund must pay income tax on this income, whereas it is the investor who pays income tax on the distributed amounts, even if the investor chose to reinvest the money back into the fund. Thus, most mutual funds choose to distribute all the dividends and capital gains to their investors; doing otherwise is less beneficial to the fund (and to the investors too, though in view of the recent tax law changes that slashed corporate tax rates, this might no longer be true).