EN United States Individual

Important Information about Capital Gains and Ordinary Income Distributions (December 2017)

Dec 01, 2017

To assist with year-end investment and tax planning, summarized below is a list of capital gains and ordinary income distributions preliminary estimates.

 

The capital gains and ordinary income distributions as of November 29, 2017 are estimates and are subject to change between now and the expected payment dates due to market movements and other factors.  Final distribution rates will be published on the fund’s declaration date.

 

Why Do Funds Make Year-End Distributions? The Internal Revenue Code requires mutual funds to pay out 98% of their calendar year net investment income and 98.2% of their capital gains realized for the twelve months ended October 31 of each year to avoid excise penalty taxes at the fund level. Many funds declare dividends and capital gains distributions in December of each year to avoid those taxes. Unless fund shares are held in a 401(k) plan, IRA, 403(b)(7) account or other tax-advantaged product, those distributions are taxable, even if the distributions are reinvested in additional fund shares.

 

Should I Sell or Exchange My Shares to Avoid a Capital Gains Distribution? Because every individual’s tax and investment considerations are different, you should consult your tax or financial advisor.

 

Some Additional Reminders about Distributions:

 

  • Distributions may also be subject to state and local income taxes.
  • Selling or exchanging shares just prior to an anticipated distribution and buying them back later may trigger wash sale consequences, depending on the timing of the transactions*.
  • A purchase of shares just prior to a dividend or capital gain distribution results in a portion of the purchase price being returned to the investor as a taxable distribution.
  • Corporations, trusts, partnerships, and other types of entities that own fund shares may have special tax considerations.

 

*A wash sale occurs when an investor sells or trades stock or securities at a loss and within 30 days before or after the sale the investor: Buys substantially identical stock or securities, acquires substantially identical stock or securities in a fully taxable trade, or acquires a contract or option to buy substantially identical stock or securities.

For more information regarding Wash Sales, read IRS Publication 550, Investment Income and Expenses (Including Capital Gains and Losses).

 

Please remember that this material is only a general discussion of capital gains and federal income tax matters, provided for educational and informational purposes only, and it is not intended as tax or investment advice or for use to avoid penalties that may be imposed under U.S. federal tax laws. Each investor’s tax and investment considerations may be different. If you have additional questions, please call your financial advisor or tax consultant. If you have questions about this information provided by Barings, please contact 1.855.439.5459.

 

 

 

 

 

 

 

 

 

Estimated Year-End Distributions of Capital Gains and Ordinary Income*

 

Barings Fund Name

Short-Term Gain

($ per share)

Long-Term Gain

($ per share)

 

Ordinary

Income

($ per share)

 

Total

($ per share)

Barings Active Short Duration Bond Fund

0.0091

0.0225

-

0.0317

Barings EM Debt Blended Total Return Fund

0.1635

0.1348

-

0.2982

Barings  EM Local Currency Debt Fund

0.0089

0.0720

-

0.0809

Barings Global Credit Income Opportunities Fund

-

-

-

0.0000

Barings Global Floating Rate Fund

-

-

-

0.0000

Barings Global High Yield Fund

0.2030

0.0208

-

0.2237

Barings Total Return Bond Fund

-

-

-

0.0000

Barings U.S. High Yield Fund

0.2249

0.0773

-

0.3022

 

                  * As of November 29, 2017          

                

 

The capital gains and ordinary income distributions as of November 29, 2017 are estimates and are subject to change between now and the expected payment dates due to market movements and other factors.  Final distribution rates will be published on the fund’s declaration date.

 

The anticipated dividend ex-date for the distribution will be December 13, 2017, with a pay date of December 14, 2017.

                                                                              

For shares held in taxable accounts, short-term capital gains distributions are taxed to individuals at ordinary income rates. Long-term capital gains distributions are generally taxed at long-term capital gains rates, no matter how long shares have been held. The data shown above does not include estimates of payments of dividends from net investment income (which are taxed to individuals as ordinary income). Mutual funds may make capital gains distributions even if the net asset value per share of the fund has decreased during the tax year.

 

Before investing in any of the Barings Funds, investors should carefully consider a fund’s investment objectives, risks, charges and expenses. The prospectus which should be read carefully before investing contains fund information and may be obtained by asking your financial advisor, visiting www.barings.com/funds or calling 1.855.439.5459.

 

 

ALPS Distributors, Inc. is the distributor for the Barings mutual funds.  ALPS Distributors, Inc. and Barings LLC are separate and unaffiliated.

 

 

 

 

 

 

Media Contact

 

Michael Henry
300 South Tryon Street 
Charlotte, NC 28202 
(Tel.) 980-417-5492
Michael.Henry@barings.com

 

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