Mutual fund companies could be required to disclose the impact of taxes on portfolio returns, if a bill that has been introduced in the U.S. House of Representatives passes. Congressmen Paul Gillmore (R-Ohio) and Edward Markey (D-Mass.) introduced a bill, the Mutual Fund Tax Awareness Act of 1999, on March 11.

"Performance figures that investment companies generally disclose to their shareholders are net of fees and expenses, but not taxes," Gillmore said in a news release. "I do not think shareholders are adequately informed about the impact taxes have on their returns." Taxes can be especially high on capital gains from high portfolio turnover, he said. Currently, the average turnover rate for an actively-managed fund is 90 percent, he said.

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