Tax Managed Equity Funds and Tax Inefficiency
Posted: 27 Feb 2021
Date Written: December 23, 2020
Abstract
A lot of ETFs and mutual funds have come on the scene in the last 5 years with the label 'Tax Efficient' or 'Tax Managed'. But on a post-tax basis are these funds worth the higher fees? We look at each tax managed fund and compare it to its non-tax managed counterpart -- yielding 102 funds in total. We find weak improvements in post tax returns (greatest on a percentage basis for long duration funds). For most equity classes these marginal improvements in post-tax returns don't seem to be worth the higher fees.
Suggested Citation: Suggested Citation
Horstmeyer, Derek, Tax Managed Equity Funds and Tax Inefficiency (December 23, 2020). Available at SSRN: https://ssrn.com/abstract=3754619
Feedback
Feedback to SSRN
If you need immediate assistance, call 877-SSRNHelp (877 777 6435) in the United States, or +1 212 448 2500 outside of the United States, 8:30AM to 6:00PM U.S. Eastern, Monday - Friday.