EconPapers    
Economics at your fingertips  
 

Tax Externalities of Equity Mutual Funds

Joel M. Dickson, John B. Shoven and Clemens Sialm ()

National Tax Journal, 2000, vol. 53, issue 3, 607-28

Abstract: Investors holding mutual funds in taxable accounts face a classic externality. The after-tax return of their investment depends on the behavior of others. In particular, redemptions may force the mutual fund to sell some of its equity positions in order to pay off the liquidating investors. As a result, it may be forced to distribute taxable capital gains to its shareholders. On the other hand, new investors convey a positive externality upon existing investors by diluting the unrealized capital gain position of the fund. This paper's simulations show that these externalities are important determinants of the after-tax performance of equity mutual funds.

Date: 2000
References: View complete reference list from CitEc
Citations: View citations in EconPapers (18) Track citations by RSS feed

Downloads: (external link)
https://www.ntanet.org/NTJ/53/3/ntj-v53n03p607-28- ... es-equity-mutual.pdf (application/pdf)
https://www.ntanet.org/NTJ/53/3/ntj-v53n03p607-28- ... s-equity-mutual.html (text/html)
Access to most recent volumes (current and past two years) is restricted to subscribers and members of the National Tax Association.

Related works:
Working Paper: Tax Externalities of Equity Mutual Funds (2000) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ntj:journl:v:53:y:2000:i:3:p:607-28

Access Statistics for this article

National Tax Journal is currently edited by Stacy Dickert-Conlin and William M. Gentry

More articles in National Tax Journal from National Tax Association, National Tax Journal Contact information at EDIRC.
Bibliographic data for series maintained by Sally Sztrecska ().

 
Page updated 2020-09-08
Handle: RePEc:ntj:journl:v:53:y:2000:i:3:p:607-28