Executive summary: Vanguard’s early data points to larger-than-usual capital gains distributions in 2025—especially from PRIMECAP-run funds. I tell you which funds are paying out (and how much) before Vanguard releases its official estimates. Get an early jump on tax and portfolio planning here.
Capital gains distribution season is fast approaching. While Vanguard won’t release official estimates until November 10, I’ve got an early read on what’s likely coming.
If you need a refresher, check out my Capital Gains 101 and 102 articles. But if you don’t have time for the full lesson, here are the essentials:
Every December, Vanguard—like every other mutual fund and ETF provider—must distribute the interest, income and trading profits (called capital gains, in tax-speak) accumulated over the year. If you own a fund on its record date, you’ll receive the distribution.
And yes, those gains are taxable—even if you automatically reinvest them into the fund. (The good news: This doesn’t apply to funds held in tax-deferred accounts like 401(k)s or IRAs.)
That’s why, as the year winds down, one question always tops investors’ minds: How big will my capital gains distribution be this year?
It’s too early to know the exact numbers, but it’s not too early to start planning.
Tax Bills Coming
If you like to plan ahead, here’s your early warning: capital gains distributions are shaping up to be hefty this year.
Vanguard makes it possible to get a jump on things by publishing monthly updates on the realized gains for each of its funds. I’m not aware of any other firm that does this—and credit where it’s due, Vanguard deserves applause for that transparency.
These monthly updates give me a fairly accurate read on which funds are likely to distribute capital gains come December. While the numbers can shift a bit between September and year-end, those changes are usually minor—unless something big happens, like a manager change or large shareholder redemption that forces a fund to sell holdings.
In the table below, you’ll find all the Vanguard funds that had booked realized gains as of September 30.
If a fund is not on the list, its realized losses outweighed its gains through the end of the third quarter, and so I wouldn’t expect a capital gains distribution this year.
For each fund, I’ve included the per-share dollar gain and the gain expressed as a percentage of the fund’s price. (Note that while the dollar amount distributed by a fund’s Investor and Admiral shares may differ, it’s the same percentage of each share class’s NAV.)
I find that percentage figure especially useful—it lets you compare funds on an apples-to-apples basis. After all, a $5-per-share payout is a big deal if the fund trades at $20, but not nearly as dramatic if the share price is $100.
That said, having the per-share dollar amount makes it easier to calculate how much you will receive in gains. That helps if you are taking your distributions in cash—as I recommend—and then using that cash to rebalance your portfolio.