Capital Gains Exposure - CGE

Dictionary Says

Definition of 'Capital Gains Exposure - CGE'

An assessment of the extent to which a stock fund or other similar investment fund's assets have appreciated or depreciated, which may have tax implications for investors.

Positive exposure would mean that the assets in the fund have appreciated and that shareholders will have to pay taxes on any realized gains on the appreciated assets. Negative exposure denotes that the fund has a loss carryforward that can cushion some of the capital gains.

Calculated as:

Capital Gains Exposure (CGE)
Investopedia Says

Investopedia explains 'Capital Gains Exposure - CGE'

For example, a stock fund with a million shares currently has assets that are worth a total of $100 million. Six months ago, the assets were only worth $50 million and the fund still has $10 million worth of losses that can be carried forward. In this case, the capital gains exposure is 40% or, in other words, if the fund manager realizes the gains, each investor will have to pay taxes on a $40 capital gain.

Sign Up For Term of the Day!

Try Our Stock Simulator!

Test your trading skills!

Related Definitions

  1. Loss Carryforward

    An accounting ...
  2. Capital Gain

    1. An increase ...
  3. Diversified Common Stock Fund

    A mutual fund ...
  4. Capital Gains Distribution

    The payment of ...
  5. Asset

    1. A resource ...
  6. Taxes

    An involuntary ...
  7. Tax Umbrella

    The use by a ...
  8. Fund Of Funds

    A mutual fund ...
  9. Paper Trade

    Simulated ...
  10. Portfolio

    A grouping of ...

Articles Of Interest

  1. Minimize Taxes With Asset Location

    Learn how to maximize your investment returns with this tax-minimization strategy.
  2. Seek Out Past Losses To Uncover Future Gains

    Tax loss carry-forwards can help reduce the tax burden of owning a profitable fund.
  3. Tax Tips For The Individual Investor

    We give you seven guidelines to help you keep more of your money in your pocket.
  4. 12b-1: Understanding Mutual Fund Fees

    Many mutual funds charge investors a 12b-1 fee to pay for marketing and promotion expenses.
  5. 5 Common Misconceptions About ETFs

    The rise in these funds' popularity has contributed to misinformation about what they are and how they work. Learn more here.
  6. Using ETFs To Build A Cost-Effective Portfolio

    ETFs are a viable alternative to mutual funds, but before you invest, there are a few things you should know.
  7. 5 Things To Know About Asset Allocation

    Overwhelmed by investment options? Learn how to create an asset allocation strategy that works for you.
  8. 4 Strategies For Managing A Portfolio Of Mutual Funds

    Discover some common strategies to devise a plan and maintain your holdings to reflect it.
  9. Active Management: Is It Working For You?

    There are guidelines to be followed when comparing an actively-managed investment strategy with a benchmark.
  10. Precious Metals Funds: A Golden Opportunity?

    Used intelligently, precious metals can help an investor obtain decent returns in a terrible market.

comments powered by Disqus
Recommended
Loading, please wait...
Trading Center