While they are passive in their style, it also means they are passive in their defense of the assets.That is, the underlying equities in the fund will still take a hit in a down market, and then under perform in an uptick.If you are just moving your account to another custodian like Schwab, E-Trade, TD Ameritrade, etc...you can transfer the account with all of your investment as they are at Fidelity without the need to sell the investments.This will be treated as a disposal of their shares for CGT purposes, and so they will pay CGT based on the cost of their shares, and how long they have owned them.GOLDEN RULE: Do not assume that liquidation will always be better than a dividend.
Steve and Jane decide to get the cash out of the company.If you transfer your investments without selling them there will not be a tax issue. The only time a tax issue is created is when you sell all of your investment and transfer the cash. If this is an IRA account there is not a tax issu... If you keep the investments the same or it is in a qualified plan there should be no tax issues until you sell any of your current holdings.I would personally advise against most target date or fixed date funds.I have a brokerage account with Fidelity consisting of a mix of low-cost index ETFs and some actively managed mutual funds.I would like to transfer all assets to passive management strategy, perhaps a target retirement age fund...ideally with Vanguard.