Edmonton Retirement Planner

Which Funds are Most and Least Likely to Pay a Capital Gains Distribution?

Year-end capital gains distributions are very often the thorn in the side of investors who own mutual funds. Mutual funds that are structured as trusts can't pay capital gains taxes themselves, so the gains, along with the tax burden that comes with them, are passed on to unitholders in the form of a distribution. These distributions are often incorrectly viewed as being year-end bonuses, but fund companies aren't in the business of giving cash away and the payouts are in fact fully taxable at the relevant rate for capital gains. The best capital gains distribution is no distribution at all, but if it's any consolation, these distributions are generally a result of success within the portfolio.
The good news for fund managers (and ordinary taxpayers too) is that capital gains may be offset by previously incurred capital losses, and the greater the magnitude of the losses, the longer the fund can go before a distribution will have to be paid. The question then becomes, which funds have significant capital losses on the books? Fortunately, a fund's loss carry forwards are fully disclosed in its financial statements, and yes, we've compiled this information for you.

To read the full article click here.

Copyright © 2001 - Patrick Gibson, Edmonton Retirement Planner
Web Design: Worth-While Webs

Commission, trailing commissions, management fees and expenses all may be associated with mutual fund investments and the use of an asset allocation service. Please read the prospectus of the mutual funds in which investments may be made under the asset allocation service before investing. The indicated rates of return are the historical annual compounded total return assuming the investment strategy recommended by the asset allocation service is used and after deduction of the fees and charges in respect of the service. The returns are based on the historical annual compounded total returns of the participating funds including changes in the share or unit value and reinvestment of all dividends or distributions and does not take into account sales redemptions, distribution or optional income taxes payable by any security holder in respect ;of a participating fund that would have reduced returns. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.

The particulars contained herein were obtained from sources which we believe reliable but are not guaranteed by us and may be incomplete. The opinions expressed have not been approved by and are not those of DundeeWealth Inc., its subsidiaries, or its affiliates, including, but not limited to Dundee Securities Corporation, Dundee Private Investors Inc., Dundee Private Investors Ltd., Dundee Insurance Agency Ltd., and Dundee Mortgage Services Inc. This website is not deemed to be used as a solicitation in a jurisdiction where this Dundee representative is not registered.

The information in this communication is subject to change without notice. Dundee Private Investors Inc. or Patrick Gibson will NOT be held liable for any inaccuracies in the information not maintained by Dundee Private Investors Inc. or Patrick Gibson, such as a linked site. This communication does not constitute an offer or solicitation by anyone in any jurisdiction in which such an offer or solicitation is not authorized or to any person to whom it is unlawful to make such an offer or solicitation. Prospective investors who are not resident in Alberta should consult with their mutual fund representative to determine if these securities may lawfully be sold in their jurisdiction.

Dundee Wealth Management is a DundeeWealth Inc. Company