Tag Archives: Taxes

TFS Insurance Advisor – April 2016 Newsletter

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To download or view the entire newsletter in PDF format, please click on this link or on the pictures above.

If you have questions regarding these products, please contact or our Business Development Specialist, Thomas Hyland Jr.

Thomas P. Hyland, Jr.
Business Development Specialist
(732) 758-9300 x127
THylandJr@TFSweb.com

TFS Insurance Brokerage, Inc.

Insurance Products Offered through TFS Insurance Brokerage, Inc.
Securities Offered Through TFS Securities, Inc. Member FINRA & SIPC
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Lipper/Reuters article – Tax Drag on performance

Here is a very insightful article addressing tax adjusted returns. Your clients may be overlooking the impact of tax drag on their fund portfolios:

http://lipperinsight.thomsonreuters.com/2013/04/finding-hidden-gems-in-those-pesky-fund-documents/

Here are a few key points to highlight:

  •  Equity fund investors sacrificed 75 bps of their returns to taxes.  Fixed income fund investors gave up 186 bps.
  • There can be significant differences in the ranking of funds based on total return versus the after-tax return.
  • No Control – From purely a tax perspective, mutual funds are required to pass through virtually all of its realized income distributions and capital gains to investors.
  • Tax drag can be the largest drag on fund performance.  Even more considerable then fund expenses and loads.

I hope this article helps shed light on a topic that may be even more impactful going forward.

Consider shifting key asset classes to a vehicle where investors are sheltered from tax drag.

 

Washington D.C. Politicians Display Rare Foresight

 

The mayor of Washington D.C., Vincent Gray, rejected a bill to raise Washington D.C’s minimum wage to $12.50 an hour. While on the outside increasing minimum wage to that amount would be seen as a positive move, further analysis reveals that since the allocation of funds for labor is finite in most cases. Increasing minimum would result in fewer employees having higher wages and would actually increase unemployment.

http://www.foxbusiness.com/industries/2013/09/12/dc-mayor-vetoues-higher-wage-bill/