To the injury of chronic underperformance, mutual funds are adding the insult of unnecessarily high taxes.
The week of Dec. 15, dozens of mutual funds paid out taxable gains to their shareholders—even as the worst year of fund returns relative to market averages in modern history drew to a close.
As of Dec. 19, more than 79% of U.S. stock funds had failed to beat their market benchmarks for the year, compared with the average of 59% over the previous 25 years, according to investment-research firm Morningstar. As if that weren’t bad enough, investors in many underperforming funds will find themselves owing whopping tax bills without having sold a share. .........
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