Is "after tax" info available other than from Fidelity

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get_g0ing
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Is "after tax" info available other than from Fidelity

Post by get_g0ing »

Hello,

Recently a BH member shared with me something on the Fidelity information page for mutual funds. The "Performance & Risk" section shows you the returns "After taxes on distributions and sale of fund shares". I thought this was really neat and useful.

Image

I'd like to know if the same information is available from another source?
I looked through Morningstar and Vanguard but didn't spot something similar.

Thanks.
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firebirdparts
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Re: Is "after tax" info available other than from Fidelity

Post by firebirdparts »

That's not "information" really. It's just mild guesswork. You could duplicate it.

As far as I know, all fund companies do that, but then I use fidelity. Maybe it's just fidelity.
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dbr
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Re: Is "after tax" info available other than from Fidelity

Post by dbr »

It is meaningless because your tax costs are specific to your own income and situation.

In fact mutual funds are not taxed as entities themselves, so it doesn't even make any sense to talk about after tax performance of a fund.

I admit I don't understand why this do this. I do know that what they do is compute assuming the highest tax rates a person would have, but that still ignores all the other parts of a particular person's particular tax return in any given year.
Vanguard Fan 1367
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Re: Is "after tax" info available other than from Fidelity

Post by Vanguard Fan 1367 »

If you go to Vanguard's site and go to the research funds part of the site you will have an option for price and performance for Vanguard's Total Stock Market Fund. The price and performance will give you the after tax information you ask about.
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Big Dog
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Re: Is "after tax" info available other than from Fidelity

Post by Big Dog »

Vanguard does this as well. But you have to look at the fine print. For example, Vanguard assumes the highest federal marginal rate in their report, but no state tax.

As firebird notes, you can and should do this yourself, by first adding your federal and state marginal rates.
Ferdinand2014
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Re: Is "after tax" info available other than from Fidelity

Post by Ferdinand2014 »

dbr wrote: Mon Sep 30, 2019 9:54 pm It is meaningless because your tax costs are specific to your own income and situation.

In fact mutual funds are not taxed as entities themselves, so it doesn't even make any sense to talk about after tax performance of a fund.

I admit I don't understand why this do this. I do know that what they do is compute assuming the highest tax rates a person would have, but that still ignores all the other parts of a particular person's particular tax return in any given year.
It was another thread asking about the ETF ishares IVV vs Fidelity FXAIX, both 500 index funds. The question was what’s best in taxable. Most assumed the ETF, but the math per ishares data and Fidelity data is that the mutual fund was more tax efficient at 1,3,5 and 10 years. It in my opinion is a good apples to apples comparison as it uses the same methodology. It wasn’t meant as a calculation of an individual persons tax liability, but which is more tax efficient in general. It as already noted, assumes highest federal tax bracket, no state tax calculation and includes all fees and uses real world data which would include all the dozens of reasons that a mutual fund or ETF would have a higher or lower tax burden such as turnover, dividends, capital gains, investor flows(mutual funds), expense ratios, index tracking, cash drag, etc.
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asset_chaos
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Re: Is "after tax" info available other than from Fidelity

Post by asset_chaos »

Isn't this information---and in the form of the OP's chart---a required part of every fund's prospectus? The return after tax on distributions and fund share sales chart has been in every prospectus I recall reading for many years. Or is the question about who continuously updates the tax cost info for their funds on their website?
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Trader Joe
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Re: Is "after tax" info available other than from Fidelity

Post by Trader Joe »

get_g0ing wrote: Mon Sep 30, 2019 9:46 pm Hello,

Recently a BH member shared with me something on the Fidelity information page for mutual funds. The "Performance & Risk" section shows you the returns "After taxes on distributions and sale of fund shares". I thought this was really neat and useful.

Image

I'd like to know if the same information is available from another source?
I looked through Morningstar and Vanguard but didn't spot something similar.

Thanks.
Yes, Vanguard provides this information.
Topic Author
get_g0ing
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Re: Is "after tax" info available other than from Fidelity

Post by get_g0ing »

Trader Joe wrote: Tue Oct 01, 2019 5:37 am
get_g0ing wrote: Mon Sep 30, 2019 9:46 pm Hello,

Recently a BH member shared with me something on the Fidelity information page for mutual funds. The "Performance & Risk" section shows you the returns "After taxes on distributions and sale of fund shares". I thought this was really neat and useful.

Image

I'd like to know if the same information is available from another source?
I looked through Morningstar and Vanguard but didn't spot something similar.

Thanks.
Yes, Vanguard provides this information.
I just found it. Thanks for guiding me.
frugaltigris
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Re: Is "after tax" info available other than from Fidelity

Post by frugaltigris »

Ferdinand2014 wrote: Mon Sep 30, 2019 10:29 pm
dbr wrote: Mon Sep 30, 2019 9:54 pm It is meaningless because your tax costs are specific to your own income and situation.

In fact mutual funds are not taxed as entities themselves, so it doesn't even make any sense to talk about after tax performance of a fund.

I admit I don't understand why this do this. I do know that what they do is compute assuming the highest tax rates a person would have, but that still ignores all the other parts of a particular person's particular tax return in any given year.
It was another thread asking about the ETF ishares IVV vs Fidelity FXAIX, both 500 index funds. The question was what’s best in taxable. Most assumed the ETF, but the math per ishares data and Fidelity data is that the mutual fund was more tax efficient at 1,3,5 and 10 years. It in my opinion is a good apples to apples comparison as it uses the same methodology. It wasn’t meant as a calculation of an individual persons tax liability, but which is more tax efficient in general. It as already noted, assumes highest federal tax bracket, no state tax calculation and includes all fees and uses real world data which would include all the dozens of reasons that a mutual fund or ETF would have a higher or lower tax burden such as turnover, dividends, capital gains, investor flows(mutual funds), expense ratios, index tracking, cash drag, etc.
I agree with Ferdinand2014. Even though everyone's tax situation will be different, this is an apples to apples comparison. We were discussing in that thread that IVV loses to FXAIX by 1-2% in return after taxes and liquidation. I do not see what is wrong with the comparison. On the other hand, Vanguard fund came out slightly ahead of Fidelity fund. That difference may decrease in lower tax brackets.
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jeffyscott
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Re: Is "after tax" info available other than from Fidelity

Post by jeffyscott »

dbr wrote: Mon Sep 30, 2019 9:54 pm It is meaningless because your tax costs are specific to your own income and situation.

In fact mutual funds are not taxed as entities themselves, so it doesn't even make any sense to talk about after tax performance of a fund.

I admit I don't understand why this do this. I do know that what they do is compute assuming the highest tax rates a person would have, but that still ignores all the other parts of a particular person's particular tax return in any given year.
I believe they do it because it is required by the SEC.

It is poorly presented mis-information, IMO. I don't think it is made clear that this is completely inapplicable to retirement accounts and that it is based on someone else's tax situation, not mine.

If you have a taxable account, live in a state with no income tax, and have taxable income above $500,000 or $600,000, the the SEC wants the fund company to inform you of your after tax return. All others will have to figure it out on their own.
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Re: Is "after tax" info available other than from Fidelity

Post by abuss368 »

It is typically disclosed. Problem is the assumption uses the highest federal income tax rate and ignores state and local taxes.
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Ferdinand2014
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Re: Is "after tax" info available other than from Fidelity

Post by Ferdinand2014 »

jeffyscott wrote: Wed Oct 02, 2019 8:58 am
dbr wrote: Mon Sep 30, 2019 9:54 pm It is meaningless because your tax costs are specific to your own income and situation.

In fact mutual funds are not taxed as entities themselves, so it doesn't even make any sense to talk about after tax performance of a fund.

I admit I don't understand why this do this. I do know that what they do is compute assuming the highest tax rates a person would have, but that still ignores all the other parts of a particular person's particular tax return in any given year.
I believe they do it because it is required by the SEC.

It is poorly presented mis-information, IMO. I don't think it is made clear that this is completely inapplicable to retirement accounts and that it is based on someone else's tax situation, not mine.

If you have a taxable account, live in a state with no income tax, and have taxable income above $500,000 or $600,000, the the SEC wants the fund company to inform you of your after tax return. All others will have to figure it out on their own.
This is missing the point of the OP post in the first place. See my post above. It was in reference to a question regarding IVV vs FXAIX and relative tax efficiency in a taxable account. Not the actual tax burden for a specific individual. There was an assumption (in another thread) that the ETF would always be more tax efficient, but the real data provided by iShares and Fidelity suggests not, surprisingly.
“You only find out who is swimming naked when the tide goes out.“ — Warren Buffett
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