Tis The Season For Distributions - Adviser Investments

Tis The Season For Distributions

Don’t Let Distributions Tax Your Holiday Season

To most, Thanksgiving marks the start of the holiday season, but to investors, it also signals the beginning of distribution season.

In December, many funds will pay out accumulated income, as they do every year. This income, along with any capital gains distributions you receive from funds held outside of a tax-advantaged retirement account, is taxable in the year it is received–so any income or capital gains you get as a holiday bonus this year will have to be included in your 2012 tax return come April.

If you are planning to make any additional purchases before year-end, it’s important to know when your funds are planning to make their year-end distributions. Why? Because 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 expected dividend or capital gain), you will be on the hook to pay 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 dividend,” and it’s something we avoid whenever possible for our clients.

To help you avoid this mistake with Fidelity or Vanguard funds, we’ve put together an alphabetical list of funds that are currently scheduled to pay out income and/or capital gains next month. Fidelity funds that do not appear on the list are not expected to make distributions this year, however, this information is subject to change. (Vanguard had not released its full distribution schedule before we went to print–the list you’ll find below only includes funds expected to pay capital gains.) Note that any shares you own on the fund’s “record date” will be eligible for distributions. So, again, to avoid additional distributions just before the end of the tax-year, don’t buy a fund–or additional shares in a fund–until after the record date.




As mentioned above, the information that Vanguard has provided to date applies only to estimated capital gains distributions–the dates for each fund listed are for all share classes (Investor, Admiral, Signal and Institutional), with the exception of ETF shares, which you can find in a separate table below.






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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 fifth consecutive year, Adviser Investments was named to Barron’s list of the top 100 independent financial advisers nationwide and its list of the top advisory firms in Massachusetts in 2017. We have also been recognized on the Financial Times 300 Top Registered Investment Advisers list in 2014, 2015 and 2016.

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Disclaimer: This material is distributed for informational purposes only. The investment ideas and expressions of opinion may contain certain forward-looking statements and should not be viewed as recommendations, personal investment advice or considered an offer to buy or sell specific securities. Data and statistics contained in this report are obtained from what we believe to be reliable sources; however, their accuracy, completeness or reliability cannot be guaranteed.

Our statements and opinions are subject to change without notice and should be considered only as part of a diversified portfolio. You may request a free copy of the firm’s Form ADV Part 2, which describes, among other items, risk factors, strategies, affiliations, services offered and fees charged.

Past performance is not an indication of future returns. The tax information contained herein is general in nature, is provided for informational purposes only, and should not be construed as legal or tax advice. We do not provide legal or tax advice. Always consult an attorney or tax professional regarding your specific legal or tax situation.

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