Chapter 19. Remember, the Tax Man Cometh
Jonathan Clements, a columnist for The Wall Street Journal, recently wrote in one of his columns, “Actively managed funds, which have always struggled to beat the market, look even worse if you adjust their performance for taxes.”[1]
Paul Royce, Director of the Investment Management Division of the SEC, said in a press release, “Taxes can be the most significant cost of investing in a mutual fund.”[2]
By 2001, readers of popular press magazines began to see more and more criticisms of mutual funds with regard to the tax issue, primarily stemming from the sharp drop in the stock market coinciding with the large tax bills on distributions that came due in 2001.[3]
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