Reality Radio for a really great future.

We're talking real money.

Oh, boy, are you in for a surprise?

Well, some of you are in for a surprise, and we're here to give you a heads up on that big surprise that may come this year for people who invest,

particularly those who invest in actively managed mutual funds.

Last year was a bad year for stocks, right?

Market went down.

And yet, a number of actively managed mutual funds

are distributing gigantic capital gains distributions. In one case, in one case, the Delaware Ivy S&P 500 dividend aristocrats index fund. Now, wait, it says it's an index fund. How can they make a capital gains distribution of about half the fund's total assets, Tom?

You're not going to be an aristocrat very long if you have to pay that much in taxes.

I'm going to put that out there right now.

Well, they'll think about that.

It's around 50, 60 percent of the value in December is being paid out as a capital gain.

So it means you, the value basically of your investment

after you pay taxes on it in a taxable account is going to be reduced by 25%. It's pretty staggering.

And so, yeah, I mean, Delaware Ivy has a couple. Well, yeah, 20%. And they're not the only ones, right? I mean, T-Roe Price has a fund where it's 20% of the net asset value. You can go on and on.

But it tends to be actively managed funds. And I want to say something about the Delaware Ivy S&P 500 dividend aristocrats fund.

It, it, it, it, they, they changed it into a sustainable equity income fund.

Ah, yes. So that's why they had to sell because some of the stocks didn't fit with their ESG tilt.

And that's one of the problems again with activity.

Yeah, well, let's talk about that. So, okay, we know the turnover for some of these turnover referring to the stocks you own at the beginning of the year and the different ones you own at the end can be very high in some of these actively managed funds, right? Because as you just said, they ran into a style change here. Sometimes a manager just says, hey, it's time to bail on Tesla.

I'm going to boot it all in Microsoft.

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