In This Issue:
‘Tis the (Distribution) Season
While perhaps not as hotly anticipated as shopping the sales on Black Friday and Cyber Monday, we’re in the midst of another annual tradition that’s arguably more relevant to investors: Distribution season.
Most mutual funds pay out any accumulated income or capital gains in December. Assuming they are held outside of tax-advantaged retirement accounts such as IRAs or 401(k)s, distributions are taxable in the year they are received. Income or capital gains realized this year, then, must be included in your 2020 tax return when Uncle Sam comes for his cut in April.
In other words, avoid costly surprises by knowing when a fund will be paying its 2020 distributions.
Part of the puzzle is understanding two key dates. The first is the fund’s “record date” (the deadline by which investors must be on the company’s books in order to receive a stock’s dividend). Owning shares by the fund’s “record date” means you will be eligible for distributions. The second date is its “ex-dividend” date, or the date on which the fund’s price is reduced by the amount of the dividend or capital gain. The ex-dividend date is usually one business day after the record date. If you purchase shares of a fund prior to its “ex-dividend” date you’re responsible for taxes on the distributions even if you didn’t own the shares when that income was “earned.”
Buying shares just before the ex-dividend date is often referred to as “buying the distribution,” and it’s something that most investors will want to avoid—because it may mean paying taxes on gains you never actually realized.
In sum, instead of buying now, we advise that investors wait until after the record date to buy a fund (or additional shares) for taxable accounts.
To make this simple for Vanguard and Fidelity funds, below is a handy list of dates of when they are scheduled to pay out income and/or capital gains (or in a few cases they’ve already paid, so you’re in the clear now). Funds that do not appear here are not expected to make any this year, though this information is subject to change, as are the distribution dates themselves.
Record Date: 11/16 Ex-Dividend Date: 11/17
Fidelity Funds: Strategic Advisers Core, Strategic Advisers Growth, Strategic Advisers Value.
Record Date: 11/30 Ex-Dividend Date: 12/1
Fidelity Funds: California Municipal Income, Intermediate Municipal Income, Limited Term Municipal Income, Massachusetts Municipal Income, Michigan Municipal Income, Minnesota Municipal Income, Municipal Income 2021, Municipal Income, New York Municipal Income, Ohio Municipal Income, Pennsylvania Municipal Income, SAI Municipal Bond Index, SAI Municipal Income.
Record Date: 12/3 Ex-Dividend Date: 12/4
Fidelity Funds: Advisor International Discovery, Flex Core Bond, Flex Short-Term Bond, Flex U.S. Bond Index, California Limited Term Tax-Free Bond, Canada, Capital Appreciation, Capital & Income, China Region, Corporate Bond, Diversified International, Emerging Asia, Emerging Markets, Focused Stock, Government Income, Intermediate Bond, Intermediate Government Income, Intermediate Treasury Bond Index, International Capital Appreciation, International Discovery, Investment Grade Bond, Japan, Japan Smaller Companies, Limited Term Bond, Long-Term Treasury Bond Index, Overseas, Pacific Basin, SAI Long-Term Treasury Bond Index, SAI U.S. Treasury Bond Index, Short-Term Bond, Short-Term Bond Index, Short-Term Treasury Bond Index, Stock Selector Small Cap, Sustainability Bond Index, Tax-Free Bond, Total Bond K6, Total International Equity, U.S. Bond Index, Worldwide, ZERO Extended Market Index.
Record Date: 12/10 Ex-Dividend Date: 12/11
Fidelity Funds: Agricultural Productivity, Balanced, Balanced K6, Blue Chip Growth K6, Contrafund, Disruptive Communications, Disruptive Finance, Disruptive Medicine, Disruptive Technology, Equity-Income, Fidelity, Global Equity Income, Large Cap Stock K6, Low-Priced Stock, Magellan, Mega Cap Stock, Puritan, SAI Emerging Markets Value Index, SAI International Momentum Index, SAI International Quality Index, SAI Large Cap Index, SAI U.S. Momentum Index, SAI U.S. Quality Index, Small Cap Growth K6, Small Cap Index.
Record Date: 12/15 Ex-Dividend Date: 12/16
Vanguard Funds: International Growth, U.S. Growth.
Record Date: 12/17 Ex-Dividend Date: 12/18
Fidelity Funds: Advisor Capital Development, Advisor Diversified Stock, Blue Chip Growth, Flex Opportunistic Insights, Growth Discovery, Growth & Income Portfolio, Large Cap Core Enhanced Index, Large Cap Growth Enhanced Index, Large Cap Growth Index, Large Cap Stock, Mid Cap Enhanced Index, Mid Cap Index, Mid-Cap Stock, Multi-Asset Income, OTC Portfolio, Select Automotive, Select Biotechnology, Select Brokerage and Investment Management, Select Communications Services, Select Computers, Select Consumer Discretionary, Select Health Care, Select Insurance, Select IT Services, Select Medical Technology and Devices, Select Pharmaceuticals, Select Retailing, Select Semiconductors, Select Software and IT Services, Select Technology, Select Telecommunications, Select Wireless, Small Cap Discovery, Small Cap Growth, Small Cap Growth Index, Small Cap Value Index, Strategic Income, Trend.
Vanguard Funds: Equity Income, Global Equity, Health Care, Strategic Equity.
Record Date: 12/18 Ex-Dividend Date: 12/21
Vanguard Funds: Capital Opportunity, Explorer, Growth and Income, Mid-Cap Growth, PRIMECAP, Selected Value, Wellesley Income, Windsor, Windsor II.
Record Date: 12/21 Ex-Dividend Date: 12/22
Vanguard Funds: Core Bond, Emerging Markets Bond, Extended Duration Treasury Index, Global Credit Bond, Institutional Intermediate-Term Bond, Institutional Short-Term Bond, Intermediate-Term Bond Index, Intermediate-Term Corporate Bond Index, Intermediate-Term Investment-Grade, Intermediate-Term Treasury, Intermediate-Term Treasury Index, Long-Term Bond Index, Mortgage-Backed Securities Index, Short-Term Treasury, Short-Term Treasury Index, Total Bond Market Index, Total International Bond Index.
Record Date: 12/22 Ex-Dividend Date: 12/23
Fidelity Funds: Inflation-Protected Bond Index, Health Savings, Health Savings Index, Inflation-Protected Bond Index.
Record Date: 12/28 Ex-Dividend Date: 12/29
Fidelity Funds: Connecticut Municipal Income, Convertible Securities, Equity Dividend Income, Flex Mid Cap Growth, Global Credit, Growth Company, Growth Company K6, Growth Strategies, Growth Strategies K6, Independence, Limited Term Government, Nasdaq Composite Index, New Jersey Municipal Income, New Millennium, Strategic Dividend & Income.
Vanguard Funds: Balanced Index, California Intermediate-Term Tax-Exempt, California Long-Term Tax-Exempt, Dividend Growth, Global ESG Select Stock, High-Yield Tax-Exempt, Institutional Index, Institutional Total Stock Market Index, Long-Term Investment-Grade, Long-Term Tax-Exempt, Long-Term Treasury, Long-Term Treasury Index, Massachusetts Tax-Exempt, New Jersey Long-Term Tax Exempt, New York Long-Term Tax-Exempt, Ohio Long-Term Tax-Exempt, Pennsylvania Long-Term Tax-Exempt, Short-Term Federal, Short-Term Treasury, Total Bond Market II Index, Wellington.
Record Date: 12/29 Ex-Dividend Date: 12/30
Fidelity Funds: Asset Manager funds, Flex Freedom funds, Four-in-One Index, Freedom funds, Managed Retirement funds, Simplicity RMD funds, Stock Selector All Cap, Strategic Advisers Core Income, Strategic Advisers Fidelity Core Income, Strategic Advisers Fidelity International, Strategic Advisers U.S. Total Stock.
Vanguard Funds: Diversified Equity, Institutional Target Retirement funds, LifeStrategy funds, STAR, Target Retirement funds.
As noted above, all record dates and ex-dividend dates provided here are subject to change. You should check the date on the fund’s official informational materials before deciding to buy or sell shares of a particular fund.
Podcast: Should You Refinance Your Mortgage Now?
With mortgage rates at historic lows, refinancing has become a hot topic—but is it the right move for you?
In this episode of The Adviser You Can Talk To Podcast, Senior Financial Planner Andrew Busa, Account Executive Dina Milne and Vice President Rick Winters present five questions to ask yourself before refinancing the mortgage on your primary residence. The trio teams up to tackle the following topics:
- Need-to-know loan terms: Points, fixed vs. variable rate, contract rate vs. APR, closing/settlement costs and more
- What will refinancing cost and how might you save?
- Considerations when shopping for a lender and taking on debt
- When refinancing does and does not make sense
- …and much more
Refinancing can be a fantastic opportunity to save some money or free up cash for other purposes, but a misstep can be costly to your long-term financial plans. Click here to hear our experts’ answers to your most pressing refi questions today!
And for more on refinancing, here’s an earlier blog post on the subject.
AI Special Report: Making the Most of Your Charitable Giving
At Adviser Investments, we think charitable giving and a personalized tax strategy go hand-in-hand. In our Special Report, Making the Most of Your Charitable Giving, we explore five strategies we’ve helped clients use over the years to build their charitable legacies.
Please click here to read this exclusive report, and give us a call if you’d like to discuss how to create a tax-aware plan for your philanthropic pursuits!
Adviser Investments’ Market Takeaways
Between the election, the pandemic and impact of this year’s events on earnings, economic data and interest rates, there’s no shortage of hyperbolic headlines and provocative punditry in the financial media. Not here. In Today’s Market Takeaways, members of our investment team provide timely videos that clearly and concisely explain what we’re seeing in the markets.
Recently, Research Analyst Liz Laprade spoke about Amazon Pharmacy’s launch and its effect on health care retailers, and Vice President Steve Johnson checked in on the tug of war between dysfunction in Washington and good news on the vaccine front.
About Adviser Investments
Adviser Investments operates as an independent, professional wealth management firm with expertise in Fidelity and Vanguard funds, actively managed mutual funds, ETFs, fixed-income investing, tactical strategies and financial planning. Our investment professionals focus on helping individual investors, trusts, foundations and institutions meet their investment goals. Our minimum account size is $350,000. For the eighth consecutive year, Adviser Investments was named to Barron’s list of “America’s Best Independent Advisors” and its list of the top advisory firms in Massachusetts in 2020. We have also been recognized on the Financial Times 300 Top Registered Investment Advisers list in 2014, 2015, 2016, 2018 and 2019.
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The Barron’s America’s Best Independent Advisers rankings consider factors such as assets under management, revenue produced for the firm, and quality of practice as determined by Barron’s editors. According to Barron’s, “around 4,000” advisory firms were considered for this recognition in 2020; with about 1,200 firms receiving recognition. surveyed or considered for this recognition, nor the percentage of total participants that ultimately received recognition. For more information and a complete list of recipients visit https://www.barrons.com/report/top-financial-advisors/1000/2020. Years Received: 2020, 2019, 2018, 2017, 2016, 2015 & 2014.
The Barron’s Top Advisor Rankings by State (Massachusetts) (also referred to as Barron’s Top 1,200 Financial Advisers) considers factors such as assets under management, revenue produced for the firm, regulatory record, quality of practice and philanthropic work. According to Barron’s, “around 4,000” advisory firms were considered for this award in 2020, with about 1,200 firms receiving recognition. For more information and a complete list of recipients visit https://www.barrons.com/report/top-financial-advisors/1000/2020?mod=article_inline. Years Received: 2020, 2019, 2018, 2017, 2016, 2015 & 2014.
The Financial Times 300 Top Registered Investment Advisers is an independent listing produced annually by the Financial Times and Ignites Research. According to the Financial Times, in 2019, approximately 2000 firms were invited to be considered for its list; 740 responded, with 300 being named to this list. The listing reflects each practice’s performance in six primary areas: Assets under management (70-75% of a firm’s score), asset growth (15% of a firm’s score), years in existence, compliance record, credentials and online accessibility. For more information and a complete list of recipients visit https://www.ft.com/content/44d2b2b2-6cef-11e9-9ff9-8c855179f1c4. Years Received: 2019, 2018, 2016, 2015 & 2014.
Awards referenced above do not consider client experience and are not indicative of such. Nor are awards indicative of future performance. Unless otherwise noted, Adviser Investments does not pay a fee to participate in any of these awards. Additionally, awards typically only consider and recognize participants that choose to participate; and are often based on information supplied by the participants—such information should not be assumed to be verified by the sponsor of the award.
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