Dividend distributions are the net income from dividends and interest earned by fund securities.
Capital gains distributions are the net gains realized from the sale of fund securities.
All mutual funds periodically distribute profits they earn to investors. By law, if a fund has net gains from the sale of securities, or if it earns dividends and interest from securities, it must pass substantially all of those earnings to its shareholders or it will be subject to corporate income taxes and excise taxes. These taxes would, in effect, reduce investors' total return.
*Note for December distributions: The estimates as of September 30 are estimates of the year-end capital gain distributions and are a snapshot of realized capital gains as of September 30. Because the year-end capital gain distributions will be based on capital gains realized through October 31 (or November 30 for funds with a November fiscal year end), the actual distributions will vary from the estimates based on activity after September 30 and other tax adjustments.
Fidelity does not provide legal or tax advice. The information herein is general in nature and should not be considered legal or tax advice. Consult an attorney or tax professional regarding your specific situation.