Investing
Battered Mutual Funds Saddle Investors With Big Capital Gains
Shareholders may have to pay tax even if their fund lost money this year.
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Owning a mutual fund that’s down 20% or 30% is bad enough. Now, holders of many money-losing investments will be asked to pay capital gains taxes too.
The gains come from managers buying and selling securities inside the portfolio over the past year. If they sold a stock they’d owned for a long time, they may have a big gain on it — even if that stock, and the broader fund, are down this year.