What happened to my mutual fund holding OAKIX? It’s down 13% today!

OAKIX on Dec 14, 2006

No need to panic of course… today was the mutual fund distribution for the year for the Oakmark International Fund.

For those who don’t understand this practice… mutual funds may have transactions during the year are taxable events — like selling one of its stock for a profit. Since you’re the owner of the fund, you are the one responsible for paying that on your income taxes. To make it easy on you, mutual funds pay out a dividend at the end of the year to cover those taxes… in this case, a 13% payout by OAKIX.

The 13% payout is quite rich, but the international stocks that OAKIX focuses on have returned a heck of a year — up almost 30%.