can you share how VPGDX pays out dividends and CC?
Sure. VPGDX pays out monthly distributions. You will not know exactly until the end of the year how much of that was return of capital, capital gains, interest, or qualified dividends. So, its impossible to know for sure until you get the tax forms at the end of the year.
Historically they have managed the fund very tax efficiently and a lot of the distribution (like 50%) will be return of capital (ROC). ROC is tax free up to a point. When you get ROC it lowers your cost basis in the investment. Once your cost basis hits zero then the ROC is taxed as long term capital gains (15%).
So, it is a very tax efficient fund.
Also, the distribution amount is determined as taking the last three years value for the fund and averaging it, then taking 4% of that and distributing it monthly during the year.
So, the distribution will change every year slowly (up or down) but the monthly payout will be consistent every month for any given year. There is also an extra payout at the end of the year. Not sure how that is calculated but it is whatever extra money they need to pay out to maintain compliance as a mutual fund.
I think it is a nice fund. My Roth IRA has been 100% VPGDX for many years. If you like the idea of putting some money into unproven stuff like alternative assets instead of sticking purely to stocks and bonds, its a great choice. If you don't want to take a gamble on the "cutting edge" type stuff then maybe something like Wellessley Income would be better.
I suggest look at the assets in VPGDX and only buy it if you are ok with owning the components.
