But mutual-fund investors can't fully enjoy these pleasantries. To avoid capital-gains surprises, call fund companies and ask whether your funds will distribute taxable gains this year and, if so, what they estimate the distribution will be. Some fund families post estimates on their Web sites. Because funds generally make their distributions in November or December, you should be able to get a good feel now for what the payouts will be. Funds with New Managers Funds with new managers are especially at risk.
Newcomers often do more than a little housecleaning when they take over.
The new managers at these funds practice very different strategies than their predecessors. Even though Baron generally offsets gains by realizing losses, the fund has undergone so many changes that it could distribute a good chunk of gains to shareholders. A rash of shareholder redemptions can also lead to taxable events for those who remain behind. Shareholders who stuck with their funds received a tax bill. Other managers have their holdings acquired because other companies think they're undervalued.