Going Global: Tax-Smart Investing On The International Stage
Summary
- Over 8 trillion USD dollars of the money invested in the US mutual fund market is taxable*.
- According to Morningstar data the average active or passive US international Fund had an annual tax drag of over 1%**.
- Many capital loss carry-forwards from the 2008 financial crisis are expiring on actively managed international equity funds, which could greatly increase tax drag.
*2018 ICI Factbook
**as of March 31, 2018.
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Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
Morningstar tax drag number sources : U.S. Fund Large Blend, U.S. Fund Large Growth, U.S. Fund Large Value, U.S. Fund Mid-Cap Blend, U.S. Fund Mid-Cap Growth, U.S. Fund Mid-Cap Value, U.S. Fund Small Blend, U.S. Fund Small Growth, U.S. Fund Small Value, U.S. Fund China Region, U.S. Fund Diversified Emerging Markets, U.S. Fund Diversified Pacific/Asia, U.S. Fund Europe Stock, U.S. Fund Foreign Large Blend, U.S. Fund Foreign Large Growth, U.S. Fund Foreign Large Value, U.S. Fund Foreign Small/Mid Blend, U.S. Fund Foreign Small/Mid Growth, U.S. Fund Foreign Small/Mid Value, U.S. Fund India Equity, U.S. Fund Japan Stock, U.S. Fund Latin America Stock, U.S. Fund Miscellaneous Region, U.S. Fund Pacific/Asia ex-Japan Stock, U.S. Fund World Large Stock, U.S. Fund World Small/Mid Stock
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Date of first use: August 2018
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