| Capital Gains Distribution | |
 Distributions that are paid to an investment company's shareholders out of the capital gains of the company's investment portfolio. |
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 Capital gains distributions typically occur near the end of the calendar year and are taxable to the shareholder of the investment company. This poses a problem for some mutual fund investors who purchase new mutual funds near the end of a calendar year. Because they receive a capital gains distribution, they immediately receive taxable income and face a mutual fund NAV is reduced from the distribution. |
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 A Long-Term Mindset Meets Dreaded Capital-Gains Tax - Investors would be wise to consider the impact of capital-gains tax on their returns. Mutual Fund Basics Tutorial - Learn about the basics--and the pitfalls!--of investing in mutual funds. |
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