Mutual fund holders face double trouble

If you’re a mutual fund holder, you could face a double whammy this year.

First, the value of your holding has likely declined along with the overall market.

As shareholders exited mutual funds due to the market drop, managers were forced to sell shares to cash out these investors.

That’s where the second whammy comes from.

It’s because those sales often generate capital gains on long-term holdings that generate capital gains distributions to shareholders, who then have to pay capital gains taxes on them.

Leave a Reply

Your email address will not be published. Required fields are marked *