Sign up today and take advantage of member-only content — the kind of timely, cutting edge industry insight that only Money Management Executive can deliver.
  • Exclusive Online Only Content
  • Free Daily Email News Alerts
  • Asset Management Blogs

2000 Called Worst Tax Year Ever for Funds


Mutual funds hit investors with the highest capital gains distributions ever in 2000, according to Wiesenberger/Thomson Financial of Rockville, Md., a mutual fund tracking service.

More than nine percent of the average fund's net asset value was subject to capital gains taxes in 2000, according to Wiesenberger. At the same time, the average fund returned 0.03 percent, according to the firm. Wiesenberger is a division of Thomson Financial, the publisher of this newsletter.

Because of large built-up gains from 1999 and a high portfolio turnover in a volatile market, year-end 2000 brought the largest ever capital gains distributions, the firm said.

Last year's tax troubles may lead fund companies to introduce more tax-efficient funds, said Ramy Shaalan, an analyst for Wiesenberger.

"Investors are increasingly becoming more aware of tax repercussions," Shaalan said. "Investors have been aware all along of these repercussions but after what happened in 2000, they will become more aware and look into more tax-efficient funds."