"Default User" wrote > I have paid yearly capital gains and dividend taxes. For instance, my
It does sound like you're mistaken. The big picture: You get to increase the cost basis of your mutual fund holding by the amount of capital gains distributed each year. This is because you already paid taxes each year on these capital gains. No double taxation yada allowed.
The "cost basis" is the original cost of each purchase of shares of your mutual fund. There are a few ways of computing the capital gain for folks who regularly reinvest dividends and cap gain distributions. But the good news is that your cap gain should be quite a bit less than the current value of the mutual fund less the original purchase price.
Any load you paid at the initial purchase and subsequent purchases should result in an increase in the cost basis, too.
The internet has detailed treatments of this. Try googling for {"capital gain" "mutual fund" distribution tax}.
I see the box where Morningstar shows this fund (AIVSX, you noted) as a "blend"; yet Morningstar says on the same web page that it falls into the "large value" category. I vaguely remember an explanation for this but am too lazy to look it up. The 2% yield and a look at AIVSX's top holdings say to me "Large Value."
Total yearly expenses are 0.77%; turnover about 20%. (Plus is the load waived on reinvested distributions? Probably... ) That turnover is very likely unnecessary cap gains you're paying each year, since other funds or ETFs can get the same (or more) growth with less turnover. Per Yahoo's chart tool (not perfect but good enough as part of a quick check), AIVSX tends to mimic the S&P 500. I would consider giving up AIVSX and buying an ETF such as VV, VTI, or SPY. All have much lower expenses and turnover, thus promising greater growth of principal at lower tax cost each year.