You Can Avoid Vanguard Investors’ Tax Woes: Alexis Leondis

Investors in a Vanguard target-date mutual fund got a nasty surprise last month when they were hit with a whopping tax bill for capital gains. They’re not alone.

Data compiled by CapGainsValet shows that in 2021, a record number of mutual funds made larger-than-average capital gains distributions. Gains are recorded when fund managers sell some of their appreciated holdings, often to give departing investors their money back or to buy different investments.

Some investors forget: With mutual funds you’re on the hook for capital gains taxes not only when you sell your own shares for a profit, but also ...