Tax Adjusted Returns

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Definition

Tax Adjusted Return metrics are useful for estimating the returns an investor may realize after the tax impact but before liquidating from a mutual fund, ETF, or closed-end fund. These figures use Morningstar's tax cost ratio and assume the highest income tax bracket. The figures are not adjusted for sales loads or commission charges. All distributions are assumed to be reinvested.

Formula

((1 - Tax Cost Ratio for the period) x (1 + Total NAV Return (monthly) for the period) - 1) x 100

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