Potential Capital Gain

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Definition

Potential Capital Gain (PCG) is an estimated percentage of a fund's assets that may be distributed as future capital gains. PCG measures the gains (or losses) that have not yet been distributed to shareholders or taxed.

This metric is mainly helpful for tax planning. If your funds have potential capital gains towards the end of the year, you can estimate what the capital gain or loss may be for the investment. This can help you prepare for tax loss harvesting.

In addition, this metric can be helpful for investors considering to purchase a fund. If a fund has lots of gains that have not yet been distributed, the investor may receive capital gains distributions for gains that occurred before they purchased the fund.

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