Mutual Fund Tax Clienteles

46 Pages Posted: 12 Mar 2010 Last revised: 10 Jan 2012

Clemens Sialm

University of Texas at Austin - McCombs School of Business; National Bureau of Economic Research (NBER)

Laura T. Starks

University of Texas at Austin - Department of Finance

Multiple version iconThere are 3 versions of this paper

Date Written: December 7, 2011

Abstract

Mutual funds are held by investors in taxable and tax-qualified retirement accounts. We investigate whether the characteristics, investment strategies, and performance of mutual funds held by these diverse tax clienteles differ. Examining both mutual fund distributions and mutual fund holdings, we find that funds held primarily by taxable investors tend to choose investment strategies that result in lower tax burdens than funds held primarily in tax-qualified accounts. Despite these differences, we find no evidence that any investment constraints that may arise from these tax-efficient investment strategies result in performance differences between funds held by different tax clienteles.

Keywords: Mutual Funds, Tax Management, Retirement Accounts

JEL Classification: G11, G12, G23, G35, H24

Suggested Citation

Sialm, Clemens and Starks, Laura T., Mutual Fund Tax Clienteles (December 7, 2011). The Journal of Finance, Forthcoming; McCombs Research Paper Series No. FIN-01-10; AFA 2011 Denver Meetings Paper. Available at SSRN: https://ssrn.com/abstract=1569043 or http://dx.doi.org/10.2139/ssrn.1569043

Clemens Sialm

University of Texas at Austin - McCombs School of Business ( email )

Austin, TX 78712
United States

HOME PAGE: http://faculty.mccombs.utexas.edu/Clemens.Sialm/

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Laura T. Starks (Contact Author)

University of Texas at Austin - Department of Finance ( email )

Red McCombs School of Business
Austin, TX 78712
United States
512-471-5899 (Phone)
512-471-5073 (Fax)

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