Distribution Dates for Vanguard and Fidelity Funds - Adviser Investments

Distribution Dates for Vanguard and Fidelity Funds

November 17, 2017

Vanguard Expands Bond ETF Lineup

Last week, Vanguard launched its first exchange-traded fund (ETF) comprised solely of ETFs, something we previously discussed when the firm first filed paperwork with the Securities and Exchange Commission. This ETF-of-ETFs—the Vanguard Total Corporate Bond ETF—trades under the ticker symbol VTC and charges 0.07% in expenses.
If you missed our earlier coverage, here’s a refresher on the new fund now that it’s available to investors. The ETF seeks to track the Bloomberg Barclays U.S. Corporate Bond Index through direct investments in Vanguard’s three existing maturity-based corporate bond ETFs: Short-Term Corporate Bond ETF, Intermediate-Term Corporate Bond ETF and Long-Term Corporate Bond ETF.

Vanguard claims the ETF-of-ETF structure provides immediate economies of scale for Total Corporate Bond ETF, which will be passed on to shareholders by way of lower expenses and trading costs.

Indeed, the low cost of the component funds makes Total Corporate Bond ETF’s 0.07% price tag at the forefront of the ongoing battle between fund companies to provide the least expensive investment vehicle on the market.

It’s certainly possible that the fund will do well, though performance will come with higher risk than found at its more diversified Vanguard cousin funds such as Total Bond Market Index or Core Bond. And it’s not necessarily a better mid-maturity alternative than the existing Intermediate-Term Corporate ETF, itself a component of this new all-inclusive option. We’d advise any interested investors to carefully research the options available before adding this fund to their portfolios.
 

Preparing Your Portfolio for Distribution Season

While it may not be as fun to think about as planning a Thanksgiving menu, there’s another upcoming annual tradition investors should prepare themselves for: Distribution season.
As they do every year, most mutual funds will pay out any accumulated income in December. This income, as with any capital gains distributions you receive from funds held outside of a tax-advantaged retirement account, is taxable for the year it is received. Meaning income or capital gains you get this year have to be included in your 2017 return when Uncle Sam comes for his cut in April 2018.
Thinking about buying shares in mutual funds before year-end? Check when the funds you’re planning to invest in plan their 2017 distributions—failing to research this can be a costly, avoidable mistake. If you buy shares of a fund prior to its “ex-dividend” date (the date on which the fund’s price is reduced by the amount of the dividend or capital gain), you’ll be responsible for taxes on distributions on those shares even though 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 we generally avoid for our clients. Note: Any shares you own on the fund’s “record date” will be eligible for distributions. We’d also point out that exchange-traded funds (ETFs) distribute on a different schedule, with the ex-dividend date falling two business days before the record date.
To help you avoid buying the distribution on your Vanguard and Fidelity funds, below you’ll find a list of those that are scheduled to pay out income and/or capital gains before year-end. Funds that do not appear on this the list are not expected to make distributions this year, though this information is subject to change (as are the distribution dates).
Payouts usually come one day after the ex-dividend date, and are then reinvested, deposited into investors’ accounts or sent out as a check, depending on the standing instructions to the fund company.
So, in sum, to avoid the IRS taking a bigger bite out of your earnings come tax time, the investment rule of thumb when making year-end decisions: Don’t buy a fund (or additional shares in a fund) for taxable accounts until after the record date.

Record Date: 11/27               Ex-Dividend Date: 11/28

Fidelity Funds: Arizona Municipal Income, California Municipal Income, Limited Term Municipal Income, Maryland Municipal Income, Massachusetts Municipal Income, Michigan Municipal Income, Minnesota Municipal Income, Municipal Income, New York Municipal Income, Ohio Municipal Income, Pennsylvania Municipal Income, Tax-Free Bond.

Record Date: 11/30               Ex-Dividend Date: 12/1
Fidelity Funds: Event Driven Opportunities, Export and Multinational, Intermediate Government Income, Intermediate Treasury Bond Index, Large Cap Stock,
Leveraged Company Stock, Magellan, New Markets Income, SAI U.S. Momentum Index, SAI U.S. Quality Index, Select Communications Equipment, Select Energy Service, Select Environment and Alternative Energy, Select Semiconductors, Select Technology, Select Utilities, Select Wireless, Small Cap Discovery, Small Cap Growth, Small Cap Stock, Small Cap Value, Strategic Advisers International Multi-Manager, Telecom and Utilities.
Record Date: 12/4                 Ex-Dividend Date: 12/5
Fidelity Funds: All Multi-Manager funds.
 
Record Date: 12/7                 Ex-Dividend Date: 12/8
Fidelity Funds: Balanced, Blue Chip Growth, Blue Chip Value, Canada, Capital Appreciation, China Region, Commodity Strategy, Contrafund, Disciplined Equity, Diversified International, Dividend Growth, Emerging Asia, Emerging Europe/Middle East/Africa (EMEA), Emerging Markets, Emerging Markets Index, Equity-Income, Fidelity Fund, Focused Stock, Global Balanced, Global Commodity Stock, Global ex. U.S. Index, Growth Discovery, International Capital Appreciation, International Discovery, International Enhanced Index, International Growth, International Small Cap, International Small Cap Opportunities, International Sustainability Index, International Value, Japan, Japan Smaller Companies, Large Cap Core Enhanced Index, Large Cap Growth Enhanced Index, Large Cap Value Enhanced Index, Latin America, Low-Priced Stock, Mega Cap Stock, Mid Cap Enhanced Index, Mid Cap Value, Mid-Cap Stock, Nordic, OTC, Overseas, Puritan, Small Cap Enhanced Index, Stock Selector Large Cap Value, Stock Selector Small Cap, Total International Index, U.S. Sustainability Index, Value Discovery, Value, Worldwide.
Record Date: 12/12               Ex-Dividend Date: 12/13
Vanguard Funds: Intermediate-Term Investment-Grade, Long-Term Investment-Grade, Long-Term 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 Bond Index, Short-Term Government Bond Index,.
Record Date: 12/14               Ex-Dividend Date: 12/15
Fidelity Funds: Emerging Markets Discovery, Europe, Extended Market Index, Global Equity Income, International Index, International Real Estate, Mid Cap Index, Pacific Basin, Real Estate Income, Real Estate Investment, SAI Emerging Markets Index, SAI International Index, SAI International Minimum Volatility Index, SAI U.S. Minimum Volatility Index, Select Air Transportation, Select Automotive, Select Banking, Select Brokerage and Investment Management, Select Chemicals, Select Computers, Select Construction and Housing, Select Consumer Discretionary, Select Consumer Finance, Select Consumer Staples, Select Defense and Aerospace, Select Energy, Select Financial Services, Select Health Care, Select Health Care Services, Select Industrial Equipment, Select Industrials, Select Insurance, Select IT Services, Select Leisure, Select Materials, Select Medical Equipment and Systems, Select Multimedia, Select Natural Gas, Select Natural Resources, Select Pharmaceuticals, Select Retailing, Select Software and IT Services, Select Telecommunications, Select Transportation, Small Cap Index, Strategic Advisers Core Multi-Manager, Strategic Advisers Growth Multi-Manager, Strategic Advisers Small-Mid Cap Multi-Manager, Strategic Advisers Value Multi-Manager, Total Emerging Markets, Total Market Index, Trend.
 
Record Date: 12/15               Ex-Dividend Date: 12/18
Vanguard Funds: Capital Opportunity, Equity Income, Explorer, Explorer Value, Growth and Income, International Explorer, Mid-Cap Growth, Morgan Growth, PRIMECAP, PRIMECAP Core, Selected Value, Strategic Equity, Strategic Small-Cap Equity, U.S. Growth, U.S. Value, Wellesley Income, Windsor, Windsor II.
Record Date: 12/19               Ex-Dividend Date: 12/20
Vanguard Funds: Dividend Growth, Health Care.
Record Date: 12/21               Ex-Dividend Date: 12/22
Vanguard Funds: Alternative Strategies, Convertible Securities, Inflation-Protected Securities, Intermediate-Term Bond Index, Total Bond Market Index, Wellington.
Record Date: 12/21               Ex-Dividend Date: 12/26
Vanguard ETFs: Extended Duration Treasury, Intermediate-Term Bond, Total Bond Market.
Record Date: 12/22               Ex-Dividend Date: 12/26
Fidelity Funds: All Asset Manager funds, Connecticut Municipal Income, Equity Dividend Income, Growth Company, Growth Strategies, Independence, Inflation-Protected Bond, Large Cap Growth Index, Large Cap Value Index, Nasdaq Composite, New Jersey Municipal Income, New Millennium, SAI Small-Mid Cap 500 Index, SAI U.S. Large Cap Index, Stock Selector All Cap, Stock Selector Mid Cap, Strategic Dividend & Income, Strategic Income, Value Strategies.
Record Date: 12/27               Ex-Dividend Date: 12/28
Fidelity Funds: Four-in-One Index, all Freedom funds, all Freedom Index funds, Global Strategies, all Managed Retirement funds, all Simplicity RMD Income funds, Strategic Advisers Core, Strategic Advisers Emerging Markets, Strategic Advisers Growth, Strategic Advisers International, Strategic Advisers International II, Strategic Advisers Small-Mid Cap, Strategic Advisers Value.
Vanguard Funds: Diversified Equity, all LifeStrategy funds, Star, all Target Retirement funds.

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