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For the last 10 years or so, I've been in a lousy-performing world stock fund: high fees, rotten performance both in absolute terms and in comparison to other funds in the same category.
Anyhow, I just got a statement saying it has been merged with the fund company's slightly-less-stinky (and about three times as large, assets-wise) global utilities fund.
If I continue to hold, am I likely to get unusually large distributions due to the merger? On the other hand, if I sell the thing within the next few months, will I have short-term capital gains (because I just got swept into this merged fund) or will they be long-term GCs (because my holding dates back a decade)?

uc
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If you sell the fund now, you have gains or losses depending on the date(s) when you bought your shares. They would be long term except for any shares bought within the 12 months prior to the sale. The merger should have no effect.
If the utility fund has capital gains and the fund manager sells some appreciated stock this year, there may well be capital gains distributions at the end of the year. Your capital gain is what you get when you sell minus what you paid when you bought (total, including any reinvested dividends). The merger can have a big effect on what distributions may be made.
Best wishes, Chris
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Crosenfield, thank you for the excellent reply.

uc
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