![]() ![]() Tax-Adjusted Return shows the pre-liquidation after-tax return for selected products.How did the product compare to peers in reducing tax drag? Again, lower is better. This hard-to-find number from Morningstar shows how much return is lost to taxes or the “hidden” expense ratio.Current performance may be lower or higher than the performance data quoted. Investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance information is historical and does not guarantee future results. The tool enables you to easily select two different views so you can look at both return lost to taxes and tax-adjusted returns or pre-tax returns. ![]() Step 3: Then add a mutual fund, ETF and/or Morningstar peer universe category to compare.Step 2: Select a Russell Investments Fund.Step 1: Start by accessing the tool here or from any of our tax-managed mutual fund pages.How to use the Tax Impact Comparison Tool in 3 easy steps The tool gives you the ability to compare thousands of mutual funds, ETFs and Morningstar categories so that you can better determine the tax implications between products and categories. equity products (active, passive, ETFs), the average product surrendered 2% of its pre-tax return to taxes for the three years ending September 2022 according to Morningstar * Since this is an average, some investment products lose a materially higher amount and some lose less. Our online tool is intended as a resource to help advisors and their clients make informed decisions about the tax-impact of different investments.īy way of example, looking broadly at U.S. Discovery and insights across investment products & categories Making it easier to evaluate the benefits of tax-managed investing can help these discussions be more compelling. We work with and educate many advisors on how to incorporate the magnitude of tax drag in their conversations with both clients and prospects. It helps you show your clients the magnitude of this hidden expense ratio. To help investors see this tax impact, we offer our Tax Impact Comparison Tool. You could say that it serves as an additional fund expense for the benefit of Uncle Sam. The return lost to taxes is often a higher number than the stated expense ratio. When evaluating investment options, investors typically look at pre-tax returns, net expense ratios, fund size, active share, portfolio turnover and similar statistics.īut taxable investors tend to overlook the figures that have as big or bigger impact: the amount of return surrendered to taxes and the actual after-tax returns. It’s one thing to conceptually understand why taxes can reduce investment returns, but it’s a completely different thing to actually see how big this impact can be. We’ve spent the better part of the last 10+ years talking about the serious headwinds that taxes have on investor returns. ![]()
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