DDollar
Expert Alumni

Investors & landlords

When a mutual fund sells investments inside the fund, it realizes capital gains and losses.  The fund could be selling investments that it has held for a long time with very significant gains.  The investments sold could have even decreased during 2018, and have been sold for a large gain, nonetheless.  It sounds like your fund had a fair amount of that.  By law, mutual funds are required to distribute virtually all of the net capital gains (and dividends) to shareholders.


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