This document discusses distributions from mutual funds and exchange-traded funds (ETFs). It explains that mutual funds can distribute income, dividends, short-term capital gains, and long-term capital gains to shareholders. It also notes that when a mutual fund sells assets that have appreciated over many years, the capital gains are distributed to current shareholders even if they have only held the fund for a shorter period. The document additionally covers how mutual fund managers determine which assets to sell when redemptions are requested and that mutual funds carry over capital losses instead of distributing them. Finally, it states that ETFs also distribute income, dividends, and any realized capital gains or losses to shareholders.

1. Mullooly Asset Management Podcast
May 1, 2013
Mullooly Asset Management May 2013

2. Distributions from Mutual Funds
Income
Dividends from holdings
Short term capital gains
Long term capital gains
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3. Capital Gains Vary
Suppose the mutual fund invested in IBM in 1994, but
did not sell it until 2013
You pay all the capital gain for twenty years, even
though you've been in the fund for far shorter period
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4. Capital Gains Vary
Suppose you MANAGE a mutual fund
You have small large holdings that trade each day
with lots of volume
You also own other stocks that do not trade very
often
When a large number of sale requests come in, which
do you sell first?
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5. What About Capital Losses?
Not in mutual funds (carried over instead)
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6. Exchange Traded Funds
Distributions from ETF’s:
- Income
- Dividends
- Gain or loss on the investments
- Gain or loss may be short or long term
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7. None of the securities mentioned in this (or any) podcast or
video represent past specific recommendations of Mullooly
Asset Management.
This video is NOT a recommendation to buy or sell any of
the securities mentioned here.
If you’re relying on a podcast for investment advice, you are
likely making a huge mistake.
We strongly urge our listeners to consult with their
investment advisor before they make a decision to buy or
sell any investment.
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8. Mullooly Asset Management, LLC
support (at) mullooly (dot) net
732-223-9000
www.mullooly.net
Mullooly Asset Management May 2013