Capital gains distribution season is fast approaching, and while Vanguard will provide more information later in November, I have a sneak peek of what’s to come.

Every December, Vanguard, like all its mutual fund industry competitors, pays out interest, income and capital gains that have accumulated over the year. This isn’t a choice—it’s a legal requirement.

I will go into the ins and outs of capital gains distributions in the weeks ahead—and provide you with a schedule of when each Vanguard fund is paying out to shareholders. But here are the basics.

Every fund, even index funds, engages in at least a little trading activity during the year. When the fund tallies up its trades near the end of the year, if the profits outweigh the losses from all of those sales, then the net realized “capital gains” must be distributed to shareholders.

As a fund shareholder, you are taxed on the capital gains you receive, even if you reinvest the distribution straight back into the fund. (Though you don’t have to worry about this for funds you hold in retirement accounts like a 401(k) or IRA.) So, the question of how much investors will receive in capital gains is always top of mind as the end of the year approaches.

I expect Vanguard will provide an estimate of how much its funds will distribute on November 13. But we don’t have to wait to start planning.

We can get a jump on things because Vanguard leads the industry when it comes to transparency on capital gains.

Every month, Vanguard reports on the capital gains status for each of its funds, indicating the net profits (or losses) each fund has generated for the year to date. I’m unaware of any other fund company that does this—and I applaud Vanguard for it. 

This data gives shareholders early and fairly accurate insights into how much each fund is poised to distribute as the year comes to a close.

While the numbers can (and do) change before distributions are paid, the changes tend to be pretty small between September and December unless exogenous events—such as a large redemption or investment or Vanguard firing a manager—change the portfolio’s constitution.

In the table below, you can find all of the Vanguard funds that had realized gains on the books as of September 30.

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