@TheShadow has an annual thread on fund distribution links.
This thread is to note mutual funds/OEFs that have outrageously high yearend distributions. Culprits are high outflows and/or recent manager changes (new managers want to start with fresh portfolios for their tenure).
This problem isn't significant for ETFs, but those too can have notable CG distributions when there are heavy outflows (their advantage of "in-kind trading without tax impact" basically runs out). Vanguard's dual OEF and ETF class structure also bites because both VG OEFs and VG ETFs have identical CG distributions (as % of prices).
M* RK has noted 3,
https://www.morningstar.com/funds/3-funds-whose-tax-bills-might-tick-upAKREX, outflow 9.2% of AUM
VPMAX, outflow 6.8% of AUM
DHSCX, outflows and manager change, 03/2023 (from the link at
@TheShadow, est 21.65%!)
Too early for the amounts of CG distributions.
Posters should add more as they learn about large ( > 5%) yearend CG distributions.
Comments
These funds tend to have very low turnover for active funds so excessive turnover is not an issue.
It's probably best to hold Primecap funds outside of taxable accounts.
T-C G&I TIGRX / TRGIX 18.42% / 17.90%
T-C LC Value TRLIX / TRLCX 5.95% / 5.98%
Following are not large but notable for index funds.
T-C LC Value Index TILVX / TRCVX 2.52% / 2.47%
T-C SC Blend Index TISBX / TRBIX 1.46% / 1.46%
T-C LC Growth Index TILIX / TRIRX 1.27% / 1.26%
A common theme of these index funds is the use of Russell indexes that aren't selective and reconstitute in a poor way (all on a preannounced day).
https://www.morningstar.com/funds/which-popular-funds-will-hit-investors-with-big-capital-gains-distributions-this-year
"Diamond Hill Small Cap Fund DHSCX will likely make a whopping 23% distribution. In the 12 months ending in September, the fund’s assets have shrunk by nearly 25% owing to outflows."
"Delaware Ivy Value IYVAX has suffered outflows of almost 50% this year, which has contributed to almost a 30% estimated distribution."
"Two Federated Hermes strategies, Federated Hermes Kaufmann Large Cap KLCKX and Federated Hermes Max Cap Index FMXKX, will likely distribute roughly 25% in capital gains. Federated Hermes Kaufmann large Cap has seen an estimated 22% of its assets leave as outflows so far in 2023."
"Ironically, J.P. Morgan Tax Aware Equity JPDEX will likely distribute at least 20%; the $828 million in assets fund has seen more than $240 million in outflows in 2023."
STSCX is paying a large distribution.
DWS Equity 500 Index Fund I-class BTIIX AUM history from Fido,
https://fundresearch.fidelity.com/mutual-funds/view-all/25159R106
2021 $317.87 million
2022 $217.82 million
2023 $101.87 million
M* is showing 2023 AUM in ALL classes as $338.6 million,
https://www.morningstar.com/funds/xnas/btiix/quote
BTIIX ER is 20 bps net, 30 bps gross - too high when one can buy cheap ETFs IVV, VOO, SPLG, SPY.
So, with severe outflows, index funds can have huge CG distributions.
Why hold BTIIX when you can track the S&P 500 for 5 bps or less?
Its high outflows were in 2022. 2023 to 9/30/23 looks OK asset-wise. So, there must be huge turnover or churn to cause that high CG distribution in 2023 (or, is that data from last year?). Fido data on combined AUM:
2021 $5.76 billion
2022 $3.91 billion
2023 $3.89 billion
BoNY/Mellon has a storied history as among the 1st bank in the US (and Alexander Hamilton was among its founders). But who pays ER of 50/21 bps for SP500 index?
Useless trivia: PEOPX ticker comes from the Dreyfus fund's old (1990s) name: People's Index Fund. (A fund for the people? Your guess is as good as mine.)
PEOPX, ER 50 bps
2021 $2.57 billion
2022 $1.87 billion
2023 $1.99 billion
DSPIX, ER 21 bps
2021 $3.20 billion
2022 $2.04 billion
2023 $1.90 billion
That doesn't change the fact that 2022 was a huge outflow year, but 2023 in so-so.
The STSCX distribution is expected to be $16.675 plus a small STCG. The closing price on 9/29 was $52.79 so the estimated distribution would be an estimated 31.72%.
Google books search will dig up old copies of Kiplingers for info like this.
How can things go so wrong in a "Tax Aware" fund? Of course, heavy redemptions and/or manager incompetence.
JPM is also mad and is just shutting down the fund, TwitterLINK
https://www.sec.gov/Archives/edgar/data/1217286/000119312523277672/d372772d497.htm
Edit/Add. Looking at fund data for JPDEX from Fido and M*, this Fund has been in redemption for years, and has distributed large CGs before. So, the question is, what took JPM so long to kill it?
https://fundresearch.fidelity.com/mutual-funds/view-all/4812A1654
https://www.morningstar.com/funds/xnas/jpdex/performance
https://www.morningstar.com/etfs/few-etfs-are-paying-out-capital-gains-2023
The funds you listed are the same as in the WSJ. I am not surprised due to the relationship between WSJ and Barron's.
New Year brings new records. Looks like this ETF made an almost 50% distribution at the yearend.
https://twitter.com/syouth1/status/1742001236923015317
https://finance.yahoo.com/quote/PFIX/history?p=PFIX
https://stockcharts.com/h-perf/ui?s=PFIX&compare=_PFIX&id=p45804732157