What Mutual Funds Really Return After Taxes

Fortin, Rich; Michelson, Stuart
April 1996
Journal of Financial Planning;Apr96, Vol. 9 Issue 2, p60
Academic Journal
This article examines the after-tax performance of a large population of mutual funds across investment classifications over time.
The majority of mutual fund studies have examined mutual fund returns on, a before-tax basis. Two recent exceptions to this are Jeffrey and Amott [Spring 1993], who examine the after-tax performance of 72 large equity mutual funds, and Siegel and Montgomery [Winter 19951, who examine the after-tax returns of Ibbotson Associates data. Certainly, investors should be primarily interested in their after-tax returns. High before-tax returns in an aggressive mutual fired with high turnover could result in lower after-tax returns than a comparable low-turnover fund because of the gains realized and passed on to the investor.


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