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Qualified dividends are dividends received by a fund from a stock, provided that the fund has held the stock for a required holding period. Mutual funds may pass through to investors any qualified dividends it receives. At the fund level, these may be applied to ordinary income and/or short-term capital gains distributions.
Qualified dividends are taxed at the long-term capital gain rates. To qualify for these reduced rates, you must own the mutual fund's shares for a period of 61 days or longer. That period must include the date the fund distributed the dividends.
The table below reflects the percentage of each fund's distributions that are considered qualified.
* Ordinary dividends includes net investment income distributions and short-term capital gain distributions.
** Please note this rate applies to distributions from 10/2/2017 to 12/31/2017.
On May 7, 2018, the Adaptive All Cap Fund's name changed to Adaptive Small Cap Fund.
On April 10, 2017, the Disciplined Growth Plus Fund changed its name to AC Alternatives Disciplined Long Short Fund.
On October 20, 2017, the New Opportunities Fund combined into the Small Cap Growth Fund.
Lowered rates for qualified dividends are a result of the 2003 Tax Act and have been made permanent by the American Taxpayer Relief Act of 2012.
IRS Circular 230 Disclosure: American Century Companies, Inc. and its affiliates do not provide tax advice. Accordingly, any discussion of U.S. tax matters contained herein (including any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone unaffiliated with American Century Companies, Inc. of any of the matters addressed herein or for the purpose of avoiding U.S. tax-related penalties.
This information is for educational purposes only and is not intended as tax advice. Please consult your tax advisor for more detailed information or for advice regarding your individual situation.