Tax Cost Ratio

View Financial Glossary Index


The Tax Cost Ratio refers to the amount that a fund's annualized return is reduced by taxes that investors pay on distributions (including stock and bond dividends and capital gains distributions).

Also known as tax efficiency, is important for investors to look at because it gives them a clear idea of how much the annualized returns will be reduced by taxation.

For example, if a fund has a Tax Cost Ratio of (5Y) of 0.9%, it means on average investors lost 0.9% of their assets in taxes each year over the past 5 years.

Are you an investing professional?

Click here to request a live demo of YCharts Professional, our premium suite of tools and data.
Learn more about our professional products. Call (866) 965-7552 or email




Please note that this feature is only available as an add-on to YCharts subscriptions.

Please note that this feature requires full activation of your account and is not permitted during the free trial period.

Start My Free Trial {{}} No credit card required.

Already a subscriber? Sign in.