Go-Go Growth Funds to Pay Big Capital Gains
Investors at Janus, PBHG, and American Century could feel tax bite.
Some aggressive growth funds at Pilgrim Baxter, American Century Investments, and Janus Capital made investors happy last year with triple-digit returns. This year some of those funds could make Uncle Sam happy by making big income and capital-gains distributions.
If shareholders don't hold these funds in tax-deferred accounts, such as Individual Retirement Accounts and 401(k) plans, they could end up paying taxes on the distributions that, in some cases, could amount to between 25% or 30% of the fund's net asset values.
Dan Culloton does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.