My mutual fund gained $177 in value for 2018 but the long term capital gain was $1984. How can this be?

[gator30024]

It doesn't make sense that the capital gain was much, much higher than the fund earn as a total for the year.

[fanfare]

that's how it goes with mutual funds. You're better off avoiding their fees and making your own investment decisions.

[DDollar · Accepted solution]

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.

[gator30024]

Thanks, David

[DDollar]

You're welcome.  Thanks for using TurboTax!!