How are capital gains calculated on a managed portfolio?

Capital gains on a managed portfolio are calculated by determining the difference between the selling price and the purchase price of each asset within the portfolio. When an asset is sold, the gain or loss is realized, and these gains are typically categorized as short-term (for assets held less than a year) or long-term (for assets held longer). The total capital gains for the portfolio are then aggregated, and any applicable taxes are applied based on the type of gains. Portfolio managers often provide a summary of these calculations in performance reports.