Received a call from a Victory rep a little while ago. He said the purpose of call was to alert me that USAA (Victory) mutual funds I hold will be making large capital gains distributions in Dec 2019. He indicated there was no other reason for the call.
Has anyone else had this experience?
You're getting huge capital gains taxes because Victory portfolio managers decided to screw fundholders and just sell every stock they don't own in their "model portfolio" (regardless of the investment merits of the company shares and buy every stock in the model portfolio not owned.
They could have "transitioned" the accounts (selectively selling off the stocks they believe are overvalued and replacing them with companies in the model portfolio, but that takes "too much work." The impact on you is tax inefficiency and higher transaction costs (plus indication of poor client focus).
I believe the monthly (it may be quarterly) stock holdings are publicly available. Check out what was owned before Victory Capital took over and what they bought and sold. Pretty sure this is on Morningstar, but not positive. I know it's out there because mutual funds are required to disclose the information by the SEC.
Don't be surprised to see them buying, at higher prices, stocks they recently sold (or selling stocks just after they bought them). This increases transaction costs (commissions, market impact, etc.) and taxes.
Happens all too frequently by companies run like this...
Thank you for reaching out to us today @CWOAvn, I was able to locate your profile and will engage the appropriate area for review. Once reviewed they will contact you, we do appreciate your patience in advance. -Emily
This is really poor customer service, and has a dramatic negative financial impact. On my USAA MF's I had $32,000 in capital gains I had not counted paying. This is really very unprofessional to spring this on us the 1 st of January.
Thanks for posts explaining how this happened.
@Jake541 It's my pleasure to let you know what is, in all likelihood, going on "behind the scenes" while an orginaization held to a "fiduciary standard," which means place YOUR financial interests AHEAD of theirs, apparantly fails to do so.
I feel like I'm not much different from a friendly neighbor who shows you how to change the oil in your car under 10 minutes and for $20 instead of paying the dealership $100+ to do it.
Knowledge is power. I'm just stretching that Wharton MBA and CFA designation for all it's worth to benefit as many as possible.