In 2014, mutual fund investors will be hit with the largest capital gains distributions since the financial crisis in 2008. As a mutual fund shareholder even if you did not sell one share of your fund you will be faced with an unexpected tax bill.
Mutual fund investors and brokers tend to pay attention to fees and past returns, but most ignore the impact of capital gains distributions.
At CJM we favor the mutual fund company Dimensional Fund Advisors for three reasons:
1. Some of the lowest expense ratios in the industry.
2. An investment philosophy based off the Fama French model which has proven to beat the S&P 500 98.75% of the time over any twenty five year period since 1927.
3. The lowest capital gains distributions in the industry.