The year is winding down, which means it’s time to start thinking about taxes, unpleasant though that may be.

Capital gains and ETFs are usually not synonymous, but this year we may be seeing more distributions than years past, especially in fixed-income exchange traded funds (ETFs). Some providers have unveiled their 2010 capital gains estimates and what’s out there now could be a preview of what’s to come:

  • iShares is reporting mostly small distributions in several fixed-income ETFs, ranging from 0.02% to 0.24% of the NAV, with the exception of iShares Barclays MBS Bond Fund (NYSEArca: MBB), which is distributing gains that are 2.32% of the NAV, which is also the current yield on this fund.
  • PIMCO is reporting short-term capital gains distributions in 10 of its popular fixed-income ETFs with an ex-date of Dec. 8.
  • Vanguard is reporting estimates ranging from $0.03 up to $0.92, all in its fixed-income lineup with the exception of one ETF.

Despite the fact that most companies have so far not offered estimates, there already appears to be an interesting shift in the types of funds seeing capital gains distributions this year: the vast majority are fixed-income ETFs. In the past, it was primarily equity ETFs that have seen the distributions. Why the change?

The short answer is that capital gains are seen primarily in fixed-income this year because it’s been a banner year for bonds. During periods of rebalancing, those high-performing securities are sold, triggering a capital gain.

In actively managed bond ETFs, the driver of capital gains can be a little different. In the case of PIMCO Enhanced Short Maturity Strategy (NYSEArca: MINT), which has significant positive returns relative to its benchmark, one of the ways PIMCO gives the fund liquidity is through cash redemptions, which may also trigger gains.

Experts suggest that it’s important to have context; when there are capital gains, look at them relative to the overall performance of the fund.