The Journal of Finance, Forthcoming
46 Pages Posted: 12 Mar 2010 Last revised: 10 Jan 2012
Date Written: December 7, 2011
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: 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