No. of Recommendations: 1

What is a cap gain distribution as opposed to dividend?

Dividend distributions are taxed like dividends while capital gains distributions are taxed like capital gains. Basically it is a matter of what tax liability does the fund pass on to the shareholder. Don't forget that it used to be that dividends were taxed at a marginal rate and that long-term capital gains were taxed at a lower rate so that there is a reason why some would want to know which part of the distribution is which.

Notice the breakdown of the distribution on

I didn't see any reference to Cap Gain in the Morningstar snapshot below. Why?

This could be due to the distribution consisting of capital gains along with dividends and there is a distribution alert on the page.

Talk me out of it.

Well, back a few years ago there were a few good funds that if you look at them afterward it was likely not the best time to buy them. I give you 2 exhibits:

1) The S & P 500 beaters of the late 1990s. is a thread noting these funds and their return in 2000 though I imagine they may have had rough times after that.

2) In Search of Foolish Funds. being a different set of funds that get highlighted here. White Oak Growth(WOGSX) being one of those mentioned had these for their total returns in 2001 and 2002: -39.1%, -40.0%. That is quite the wallop.

To summarize: Could there be an oil bubble in stocks and if so what would the fall out be when it comes down? I remember when Fidelity Select Electronics was the hot fund and I doubt many would have wanted to hold it from 2000 till now all the way.

Last but not least there is the note that 2 out of the 3 managers are rather recent additions to the fund which may be a factor on future returns.

Print the post  


The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.