Mutual Funds: Trusts and Trustees: Capital Gains Distributions from Mutual Funds: Income or Principal?

Investing means using funds to start a venture or acquire part of an existing one in hopes that in time the business will accrue profits for the entrepreneur. Often, entrepreneurs opt to purchase companies' stocks. To be able to select the right – profitable – stocks to buy, one requires knowledge of modern portfolio theory, computational investing, stock brokerage, mutual funds, bonds, value investing, how capital gains are taxed, how to trade stocks and options online, and how to use diversification to allocate online investments.

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Tax Planning by Mutual Funds: Evidence From Changes in the Capital Gains Tax Rate

National Tax Journal ◽

10.17310/ntj.2011.1.05 ◽

2011 ◽

Vol 64 (1) ◽

pp. 105-134 ◽

Cited By ~ 4

Author(s):

Feng Chen ◽

Arthur Kraft ◽

Ira Weiss

Keyword(s):

Mutual Funds ◽

Tax Planning ◽

Capital Gains ◽

Capital Gains Tax ◽

Tax Rate

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The Prevalence of the Disposition Effect in Mutual Funds’ Trades

Journal of Financial and Quantitative Analysis ◽

10.1017/s0022109012000348 ◽

2012 ◽

Vol 47 (4) ◽

pp. 795-820 ◽

Cited By ~ 54

Author(s):

Gjergji Cici

Keyword(s):

Mutual Funds ◽

Academic Research ◽

Fund Performance ◽

Capital Gains ◽

Disposition Effect ◽

Learning Effects ◽

Substantial Fraction ◽

Investment Style ◽

Equity Mutual Funds ◽

Portfolio Managers

AbstractU.S. equity mutual funds, on average, prefer realization of capital losses to capital gains. Nevertheless, a substantial fraction exhibits the disposition effect of realizing gains more readily than losses. My analysis suggests that learning effects have reduced the manifestation of the disposition effect over time, implying that academic research has influenced industry practices. When funds experience outflows and are managed by teams of portfolio managers, they are more susceptible to selling disproportionately more winners than losers. Disposition-driven behavior affects investment style, causing lower market betas and characteristics of value-oriented and contrarian styles, but has no observable effect on fund performance.

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Computational Investing

International Perspectives on Socio-Economic Development in the Era of Globalization - Advances in Finance, Accounting, and Economics ◽

10.4018/978-1-4666-9908-3.ch017 ◽

2016 ◽

pp. 236-252

Author(s):

Javier Vidal-García ◽

Marta Vidal ◽

Rafael Hernandez Barros

Keyword(s):

Mutual Funds ◽

Portfolio Theory ◽

Capital Gains ◽

Modern Portfolio Theory ◽

Value Investing ◽

The Right

Investing means using funds to start a venture or acquire part of an existing one in hopes that in time the business will accrue profits for the entrepreneur. Often, entrepreneurs opt to purchase companies' stocks. To be able to select the right – profitable – stocks to buy, one requires knowledge of modern portfolio theory, computational investing, stock brokerage, mutual funds, bonds, value investing, how capital gains are taxed, how to trade stocks and options online, and how to use diversification to allocate online investments.

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Seasonal Asset Allocation: Evidence from Mutual Fund Flows

Journal of Financial and Quantitative Analysis ◽

10.1017/s002210901600082x ◽

2017 ◽

Vol 52 (1) ◽

pp. 71-109 ◽

Cited By ~ 31

Author(s):

Mark J. Kamstra ◽

Lisa A. Kramer ◽

Maurice D. Levi ◽

Russ Wermers

Keyword(s):

Risk Aversion ◽

Mutual Funds ◽

Asset Allocation ◽

Mutual Fund ◽

Capital Gains ◽

Fund Flows ◽

Flow Data ◽

Equity Funds ◽

Mutual Fund Flows ◽

Investor Preference

We analyze the flow of money between mutual fund categories, finding strong evidence of seasonality in investor risk aversion. Aggregate investor flow data reveal an investor preference for safe mutual funds in autumn and risky funds in spring. During September alone, outflows from equity funds average $13 billion, controlling for previously documented flow determinants (e.g., capital-gains overhang). This movement of large amounts of money between fund categories is correlated with seasonality in investor risk aversion, consistent with investors preferring safer (riskier) investments in autumn (spring). We find consistent evidence in Canada and also in Australia, where seasons are offset by 6 months.

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The Mutual Fund—An Institutional Investor that Acts Like an Individual

Journal of the American Taxation Association ◽

10.2308/jata.2011.33.1.1 ◽

2011 ◽

Vol 33 (1) ◽

pp. 1-24 ◽

Cited By ~ 1

Author(s):

Spencer Usrey ◽

Edward Schnee ◽

Gary Taylor

Keyword(s):

Mutual Funds ◽

Mutual Fund ◽

Institutional Investors ◽

Institutional Investor ◽

Capital Gains ◽

Mutual Fund Managers ◽

Present Evidence ◽

Investment Policies ◽

Fund Managers ◽

Tax Relief

ABSTRACT: We examine changes in the average mutual fund’s investments following the Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRR). The JGTRR decreased the tax penalty on dividend and capital gains income. We hypothesize that mutual fund managers will respond to the investment preferences of the underlying shareholders and increase their ownership of dividend-paying firms. We present evidence supporting the hypothesis that mutual fund managers increased their ownership of dividend-paying firms following the JGTRR. However, we do not find evidence that the investment managers of other institutional investors increased their ownership of dividend-paying firms following the JGTRR. These results indicate that mutual funds are influenced by the tax preferences of their underlying investors, form tax clienteles, and exhibit different investment policies when compared to other types of institutional investors.

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Opportunity Zones-The Symbiosis of Tax Incentives and Community Development

International Journal of Business and Applied Social Science ◽

10.33642/ijbass.v6n4p8 ◽

2020 ◽

pp. 64-70

Author(s):

Rachel Raskin, CPA ◽

Sharon Brickman, CPA

Keyword(s):

Community Development ◽

Mutual Funds ◽

American History ◽

Tax Avoidance ◽

Tax Incentives ◽

Capital Gains ◽

Economic Innovation ◽

Jobs Act ◽

American Cities ◽

The U.S

U.S. lawmakers have created one of the greatest tax-avoidance opportunities in American history, while simultaneously serving underperforming American cities and neighbourhood’s (Bertoni 2018). Subchapter Z of The Investing in Opportunity Act (“The Act”), as part of the 2017 Tax Cuts and Jobs Act (TCJA), amended the Internal Revenue Code to provide major tax incentives for investments in designated “Opportunity Zones”. The tax incentives act as subsidies by allowing investors to defer the recognition of capital gains from the sale of appreciated assets if they are timely reinvested in opportunity zones (Bertoni 2018). According to the Economic Innovation Group (2018), there is approximately $6.1 trillion of unrealized capital gains in stocks and mutual funds in the U.S. economy. Under the direction of sophisticated investors, this capital can be channelled to revitalize depressed communities and create jobs, infrastructure, and other economic opportunities. In a press release, the Department of Treasury (2018) revealed that it anticipates $100 billion in private funds will be invested in opportunity zones over the next eight years. If the intention of the act comes to fruition, capital gains that investors realize from selling previous investments will be used to fuel growth in economically depressed areas.

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