[Mutual Fund] Distributions & Tax Information
2008 Dividends
Following are per share capital gain and income distributions paid out on December 16, 2008.
Record Date: December 15, 2008
Ex-Dividend and Payable Dates: December 16, 2008
| FUND | Income | Short-Term Capital Gains |
Long-Term Capital Gains |
Total |
|---|---|---|---|---|
| Aggressive Inv 1 BRAGX (closed to new investors) |
$0.00 | $0.00 | $0.330127 | $0.330127 |
| Aggressive Inv 2 BRAIX |
$0.00 | $0.00 | $0.00 | $0.00 |
| Ultra-Small Co. BRUSX (closed to new investors) |
$0.030583 | $0.00 | $0.00 | $0.030583 |
| Ultra-Small Co. Mkt BRSIX |
$0.214402 | $0.00 | $0.893878 | $1.108280 |
| Micro-Cap Limited BRMCX |
$0.014525 | $0.00 | $0.00 | $0.014525 |
| Small-Cap Growth BRSGX |
$0.00 | $0.00 | $0.00 | $0.00 |
| Small-Cap Value BRSVX |
$0.073137 | $0.00 | $0.00 | $0.073137 |
| Large-Cap Growth BRLGX |
$0.073370 | $0.00 | $0.00 | $0.073370 |
| Large-Cap Value BRLVX |
$0.228039 | $0.00 | $0.00 | $0.228039 |
| Blue Chip 35 Index BRLIX |
$0.191569 | $0.00 | $0.00 | $0.191569 |
| Balanced BRBPX |
$0.359173 | $0.149450 | $0.367636 | $0.876259 |
Why should I care about the timing of future distributions?
Bridgeway typically distributes any dividends in the November to December time frame. In general, as the period approaches, it may be better to invest after the dividend "record date" if you have a high tax rate and the fund in which you are interested anticipates paying a larger dividend. If you invest through a tax-deferred account, this consideration does not matter. Consult your tax adviser for more information. If you put off investing until after the dividend date, or forget to invest altogether, it could be to your disadvantage if before your investment date, the Fund appreciates more than the amount of tax on your dividend. However, keep in mind that when to invest is a decision that can only be made by you.
Tax Efficiency
The following discussion is not applicable to shareholders in tax-deferred accounts, such as IRAs. An important aspect of fund ownership in a taxable account is the tax efficiency of the fund. A fund may have great performance, but if a large percentage of that performance is paid in taxes, the purpose of active management may be defeated. Tax efficiency is the ratio of after-tax total returns to before-tax total returns. The first column of the following table illustrates the tax efficiency of each Bridgeway Fund through December 31, 2007. It assumes that a shareholder was invested in the Fund for the full period since inception, had paid taxes at the maximum federal marginal rates, and continues to hold the shares. Currently, these rates are 35% for income, 35% for short-term capital gains, and 15% for long-term capital gains (securities held for more than one year). These calculations exclude any state and local taxes. 100% tax efficiency means that the shareholder had no taxable distributions and paid no taxes. This measure of tax efficiency ignores potential future taxes represented by unrealized gains, stocks which have appreciated in value but have not been sold. It also ignores the taxes an individual would pay if they sold their shares. The second column is the same tax efficiency number, but considers taxes paid if a shareholder sold his or her shares at the end of calendar year ended December 31, 2007.
Bridgeway Funds Tax Efficiency
| FUND | % Tax Efficiency for Shares Held | % Tax Efficiency for Shares Sold |
|---|---|---|
| Aggressive Inv 1 BRAGX (closed to new investors) |
92.45% | 88.70% |
| Aggressive Inv 2 BRAIX |
98.64% | 88.45% |
| Ultra-Small Co. BRUSX (closed to new investors) |
87.70% | 86.49% |
| Ultra-Small Co. Mkt BRSIX |
98.45% | 90.48% |
| Micro-Cap Limited BRMCX |
86.22% | 84.97% |
| Small-Cap Growth BRSGX |
100.00% | 86.87% |
| Small-Cap Value BRSVX |
100.00% | 87.31% |
| Large-Cap Growth BRLGX |
99.42% | 86.49% |
| Large-Cap Value BRLVX |
96.29% | 85.51% |
| Blue Chip 35 Index BRLIX |
93.25% | 83.36% |
| Balanced BRBPX |
91.39% | 81.59% |
Click here for Bridgeway Funds after-tax returns.