2023 Year-End Distributions

[audreyh1]

AFAIK a lot of mutual funds close their tax year on October 31 or thereabouts which allows them to estimate and then pay current year distributions in December.

It does seem odd that they haven’t yet decided.

This explains it a bit differently. Apparently it’s the capital gains distributions calcs that go through Oct 31 from Nov 1 the prior year. https://blog.umb.com/fund-services-insight-mutual-fund-year-end-distributions/

 

[MichaelB]

One reason some mutual funds delay providing estimates is they can lead to a redemptions from holders, especially if there are significant short term gains or ordinary income. Vanguard has made this clear in the past.

Unplanned or excess selling also means distributions to existing shareholders are even higher.

In this case it shouldn’t affect ETFs but definitely can impact mutual funds.

 

[BeWealthy]

Vanguard has posted 2023 Final estimated year-end distributions here.


https://advisors.vanguard.com/tax-center/year-end-distributions

 

[audreyh1]

My first set of Fidelity distributions came in yesterday. Two international funds and the cap gains came in somewhat higher than the Fidelity published estimates. Fidelity doesn’t provide dividend estimates which is pretty frustrating, so I used numbers per share from 2021 which I thought was pretty conservative. Nope, dividends came in even higher.

Overall my distributions were 16% higher than I had estimated.

Next Friday I’ll see the rest of my Fidelity distributions. I’m just hoping there aren’t too many more big surprises. I’m managing income with an eye on 2025 IRMAA levels.

I have to say overall cap gains distributions are much lower this year, maybe not as low as 2022, but certainly much lower overall than 2021 and earlier.

 

[retire48in2018]

It is frustrating to me that a significant portion of anticipated income is not known until late December (fidelity fund). I have to wait until then to finish out income.

I wish they would move this to a much earlier date. It makes a lot of timed effort at end of year to optimize income/tax evaluations.

Fidelity shows it as zero until actual date.

 

[audreyh1]

Looks like Fidelity Fund is paying distributions on 12/15. This is the same as the rest of my Fidelity funds. The few non-Fidelity funds I have left are a little later by 12/19.

Yeah, the best I can do is plan ahead, and lay out some options so that I can move quickly.

 

[audreyh1]

Today is a big distribution day for me. The rest of my Fidelity funds are distributing today plus one other fund.

 

[audreyh1]

The Fidelity distributions came in close to estimated on average, amazing since I had to guess at what the dividend distributions would be base on the past few years. Only one fund paid a capital gains distribution.

I’ve been tracking stuff closely because I’m trying to stay under a certain IRMAA level for 2025.

 

[GalaxyBoy]

How are people estimating the values of distributions that are qualified dividends vs. ordinary dividends? I'm taking the amounts from last year and using the same percentages in my estimates for this year, but I read posts saying people are able to forecast income with high precision.

 

[scrabbler1]

Fidelity surely blew it with one of my stock funds. They had estimated a 10.7 cents per share STCG for its 12/15/23 distribution. Instead, zero, zilch. That same fund's dividend was nearly the same (cents per share) as it was last year.

 

[audreyh1]

How are people estimating the values of distributions that are qualified dividends vs. ordinary dividends? I'm taking the amounts from last year and using the same percentages in my estimates for this year, but I read posts saying people are able to forecast income with high precision.

I’ve done this for a few years and it has been reasonably close, at least good enough for my tax liability estimations:

I go through the tax statement from the prior year (for Fidelity this tax info is available online under dividend details) and for each fund I calculate the ratio of qualified dividends to total dividends. I use a spreadsheet, and the Fidelity online tax info pastes into that.

So I use that ratio to estimate the current year qualified dividends.

 

[mrfeh]

I’ve done this for a few years and it has been reasonably close, at least good enough for my tax liability estimations:

I go through the tax statement from the prior year (for Fidelity this tax info is available online under dividend details) and for each fund I calculate the ratio of qualified dividends to total dividends. I use a spreadsheet, and the Fidelity online tax info pastes into that.

So I use that ratio to estimate the current year qualified dividends.

+1

For the funds I own, which are almost exclusively index funds, the ratio is usually around 90% qualified, IIRC.

 

[marko]

So with four days to go in the market I'm hovering just a tad under 13% for the year. A bit of a surprise.

But here's the thing: In dollars, 86% of that 13 has been made in the last eight weeks. On November 1st my YTD was 2.06%. Freaky! I had resigned myself to a flat year as I was having the 14th best year out of 18. Now I'm having the 6th best year out of 18...in just 8 weeks.


Thought of the day: if the "40" in your 60/40 is now pulling in ~5%-7% how does that skew things? Is it still just considered "ballast" as it competes with equities for decent performance with greater safety? I don’t really know what question to ask but when your 40 is competitive with your 60 it presents an interesting set of situations.

 

[Chuckanut]

So with four days to go in the market I'm hovering just a tad under 13% for the year. A bit of a surprise.

But here's the thing: In dollars, 86% of that 13 has been made in the last eight weeks. On November 1st my YTD was 2.06%. Freaky! I had resigned myself to a flat year as I was having the 14th best year out of 18. Now I'm having the 6th best year out of 18...in just 8 weeks.


Thought of the day: if the "40" in your 60/40 is now pulling in ~5%-7% how does that skew things? Is it still just considered "ballast" as it competes with equities for decent performance with greater safety? I don’t really know what question to ask but when your 40 is competitive with your 60 it presents an interesting set of situations.

I keep reading that the most profitable stock market gains come in short spurts of up, Up and UP stock prices. I am beginning to think that is true.

 

[audreyh1]

Thought of the day: if the "40" in your 60/40 is now pulling in ~5%-7% how does that skew things? Is it still just considered "ballast" as it competes with equities for decent performance with greater safety? I don’t really know what question to ask but when your 40 is competitive with your 60 it presents an interesting set of situations.

I don’t worry about it. I target a 50/50 asset allocation to match a certain risk profile and long term growth characteristic. I don’t care which components outperform the other components, I just rebalance as warranted.

 

[steelhead]

How are people estimating the values of distributions that are qualified dividends vs. ordinary dividends? I'm taking the amounts from last year and using the same percentages in my estimates for this year, but I read posts saying people are able to forecast income with high precision.

Vanguard has Qualified Dividend % estimates at https://advisors.vanguard.com/tax-center/qualified-dividend-income