FUEGO
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Nov 13, 2007
- Messages
- 7,746
I thought PIMCO, like any managed fund would be spinning off the interest and capital gains each year as you go along so there should not be a major tax hit for this? How could this result in a major tax hit when you sell? I thought the deferral of taxes was a benefit of index funds and the tax hit hen you sell was their downside, not managed funds. I would think the 25- 30% excess return Gross was providing versus the benchmark index over the last 10-15 years would have paid all taxes due and resulted in a large post tax position.
Now that you mention it, you're probably right regarding most PIMCO funds (are all of them bond funds?). Bond funds don't tend to have a lot of capital appreciation over time like equity funds do. Most gains from bonds are interest payments. So maybe my fears of high cap gains coming due aren't as warranted for PIMCO given they manage mostly bond funds (on an AUM basis).
Otherwise, many actively managed equities funds do appreciate over time, only spitting out some of the gains in the form of CG distributions and dividends.