How Mutual Funds Really Work: Understanding End-of-Year Distributions

I want to take a moment to clarify how mutual fund distributions work, as I’ve received several questions on this topic. At the end of the year, funds distribute earnings as additional shares, which can make it seem like the fund isn’t growing when, in reality, your total value remains the same.

Our active trading strategy locks in gains throughout the year, leading to higher returns without tax consequences in qualified accounts. In 2024, we achieved a 28% return—outperforming most. Instead of focusing solely on fund prices, I encourage you to look at your actual dollar growth.

If you have any questions, please don’t hesitate to reach out. I’m happy to review your portfolio with you.