In this informational video from Mullooly Asset Management, Tom and Brendan discuss distributions from mutual funds. More specifically they focus on capital gains in mutual funds, and how they vary. Tom goes over two, in depth examples of scenarios involving capital gains in mutual funds. One of the examples is from the viewpoint of the investor, and the other from the viewpoint of the mutual fund’s manager. This allows you to fully comprehend all aspects of these capital gains. It is important to understand capital gains in mutual funds because their variance affects you as an investor.
Tom and Brendan also cover the topic of capital losses in this video. Many investors do not know that a mutual fund will not pass through capital losses. This is only part of the reason why mutual funds can become quite complicated. There are simpler investing options to consider that the investor and their financial adviser have much more control over. These simpler investing options are called ETF’s. We have a handful of educational posts about ETF’s at Mullooly Asset Management, and we highly recommend checking them out. Tom explains how Exchange Traded Funds are simpler investing options.