Morningstar Direct, as of 12/31/23. U.S. style-box funds are those funds categorized by Morningstar as “U.S. Equity” under Morningstar’s U.S. Category group as oldest share class, non-indexed open-end funds. % of mutual funds distributing = 5-year annual average % of funds that...
ETFs may be more tax-efficient than mutual funds because the underlying securities in the fund are often traded "in-kind," that is, swapped for another security of similar value rather than sold outright. While ETFs do still distribute capital gains to investors, they tend to do so less fre...
“In a low- or no-gain environment, some funds will look more tax efficient,’’ says Duncan Richardson, chief equity investment officer for Eaton Vance, which offers nine tax-managed funds. “The problem [of tax efficiency] comes when there a lot of gains in the market.’’ Richardson e...
Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations...
Longmeier, G. & Wotherspoon, G. 2006. The Value of Tax Efficient Investments: An Analysis of After-Tax Mutual Fund and Index Returns. Journal of Wealth Management, 9, 46-53.Longmeier, G. and Wotherspoon, G. (2006), The Value of Tax Efficient Investments: An Analysis of After-Tax ...
This column outlines research focused on the factors an investor should consider when assessing the tax efficiency of his or her investment in mutual funds and exchange-traded funds invested in various asset classes and nontraditional investments such as real estate investment trusts and master limited...
"You'll have tax efficiency that a standard mutual fund is not going to be able to achieve, hands down," he said. The 'primary use case' for ETFs Mutual funds are generally less tax-efficient than ETFs because ofcapital gains taxesgenerated inside the fund. ...
Given this differential behavior, portfolio managers managing assets for both types of clients may pursue less tax efficient strategies at the expense of their taxable mutual funds in an effort to appease their existing tax-exempt SAs and avoid termination by these clients.6 We expect the incentive...
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“The overwhelming majority of ETFs will avoid the type of punch-to-the-gut taxable capital gains distributions that are in store for a large number of actively managed mutual funds this year,” Ben Johnson, Morningstar’s head of ETF research, told FT. ...