Capital Gain Stats – 2018

We are in the heart of cap gains season and have found over 80% of the firms in our expanded database. Here are the current stats:

 

275

Number of Fund Firms

in CGV Database

229

Firms That Have

Posted Estimates

 

469

Estimated Distributions Over 10%

(10% to 19%)

50

Estimated Distributions Over 20%

(20% to 29%)

19

Estimated Distributions Over 30%!

 

 

 

2018 Predictions

Are there going to be a lot of large capital gain distributions this year?

Phil Tetlock’s book “Superforecasting” provides a number of tools which can help us turn our wild guesses into reasonable predictions.  Tetlock’s Superforecasters often started with a “base rate of similar occurring events” so let’s begin there.  After tracking my own list of large capital gains distributions since 2014, I actually have some data to help select a base rate.

The average number of funds with gains in excess of 10% has been around 340.  That’s my starting point.

I have three reasons why I think this year’s numbers should be adjusted upwards:

  1. There are gains on the books – We’ve had a decade of solid returns from the stock markets so funds have lots of gains to be realized and few losses available to offset these gains.
  2. Funds are seeing outflows and are forced to take gains – We continue to see flows out from mutual funds and into ETFs; these trades create additional realized gains for the remaining shareholders.
  3. Early numbers are in – Some fund firms have already provided their distribution estimates and these numbers are ahead of last year.  Admittedly, this is a little like predicting the winner of a running race after the first lap.

So… I’ll play the role of a TV pundit and predict that we’ll see 478 funds with capital gains distributions higher than 10%.

Of course, (also like the pundits) I’ll have several reasons to explain why my prediction is off when this is the case.  Either way, I think it makes sense to be monitoring your funds for large distributions and opportunities to save some tax dollars.

 

 

 
photo credit: N@ncyN@nce The amazing Zoltar via photopin (license)

Capital Gains Stats – 2017

At this point we’ve found capital gains estimates for 85% of the firms in our expanded database. Here are the current stats:

265

Number of Fund Firms

in CGV Database

221

Firms That Have

Posted Estimates

 

306

Estimated Distributions Over 10%

(10% to 19%)

31

Estimated Distributions Over 20%

(20% to 29%)

9

Estimated Distributions Over 30%!

 

 

 

 

Capital Gains Stats – 2016

At this point we’ve found capital gains estimates for almost 90% of the firms in our expanded database. Here are the current stats:

251

Number of Fund Firms

in CGV Database

222

Firms That Have

Posted Estimates

94

Estimated Distributions Over 10%

(10% to 19%)

15

Estimated Distributions Over 20%

(20% to 29%)

5

Estimated Distributions Over 30%!

 

 

 

photo credit: Menage a Moi Day 267 – Anyone Understand Spreadsheets..? via photopin (license)

 

Capital Gains Stats – 2015

At this point I’ve found capital gains estimates for nearly 95% of the firms in my database. Here are the current stats:

213

Number of Fund Firms

in CGV Database

203

Firms That Have

Posted Estimates

336

Estimated Distributions Over 10%

(10% to 19%)

35

Estimated Distributions Over 20%

(20% to 29%)

20

Estimated Distributions Over 30%!

 

 

 

photo credit: Abacus via photopin (license)

Less Fluffy (Comparing 2014/2015 Distributions)

I’ve been gathering and posting 2015 capital gain distribution estimates for CapGainsValet for the last two months. My database currently has distribution estimates for nearly 200 fund firms. This represents over 90% of the firms I’m hoping to eventually add, which means the 2015 database is nearly complete.

I recently had a look through last year’s database to see how it compares to this year’s numbers. Here’s what I found:

  • Fewer funds are distributing more than 10%. Last year I found 517 mutual funds that distributed more than 10% of their NAV. From all indications, 2014 was one of the biggest distribution years on record. For 2015, I’ve found 381 funds that are going to distribute more than 10%. My guess is that we’ll end the year in the 390-400 range.
  • More BIG distributions. In 2014, I was able to find 12 funds that distributed more than 30% of their NAV. This year that number has already jumped to 20. Even though the number of 30% distributors has increased, the number of funds that are distributing between 20% and 30% of NAV is about half of what it was last season.
  • Several big names in the doghouse. If you take a look at my “In the Doghouse” list, you will find that there are some of the bigger names in the actively managed funds universe. Montag & Caldwell Growth, Columbia Acorn and Fairholme will be distributing billions. Successful funds with large fund outflows are likely going to have trouble controlling future capital gains distributions.
  • ETFs are still looking very tax efficient. Although CGV does not track ETF distributions, I am seeing very low capital gain numbers from ETF providers. Market-cap weighted index funds and ETFs continue to be tax efficient.
  • More tax swapping opportunities. Last year’s distributions corresponded to a fairly solid year of gains – it is not looking like that will be the case this year. Last year, selling a fund before its large capital gain distribution meant little difference because the fund’s embedded gains were similar or larger. If you bought a fund this year, receiving a large distribution will likely result in a higher tax bill than if you sell the fund before its record date. At my wealth management firm we have already executed a number of tax-swap trades that will save our clients hundreds to thousands of dollars on their 2015 tax return. Have a look through your holdings for these types of opportunities.

So 2015 distributions look like they will be “less fluffy” (in aggregate) than 2014.  Unfortunately, these average numbers are not comforting if you happen to own those funds with hairy distributions.

 

 

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Capital Gains Stats – 2014

I’ve found capital gains estimates from over 90% of the firms in my database. Many of the remaining firms are not going to post estimates at all. Here are the latest stats:

 

225

Number of Fund Firms

in CGV Database

210

Firms That Have

Posted Estimates

 

453

Estimated Distributions Over 10%

(10% to 19%)

52

Estimated Distributions Over 20%

(20% to 29%)

12

Estimated Distributions Over 30%!