“Mutual funds are open-ended, which means the fund company creates or cancels shares based on investor demand. The challenge is capital gains distributions. In a high-turnover mutual fund, or one that realizes gains and losses throughout the year, investors can receive a capital gains tax bill even if they never sold their own shares.”
I use Charles Schwab and started “auto investing” this week into schwabs s&p 500 fund of SWPPX. And want to keep it going but read the info above. This is a regular brokerage account. Should I set up the auto invest into a Roth IRA the reason I picked swppx is Schwab does not allow fractional shares.m and want to have an amount and set it and forget it. Has anyone run into the problems outlined in the quotations above with mutual funds? Now I’m kind of scratching my head, thanks