Lipper will begin providing after-tax performance data on the nearly 14,000 mutual funds it tracks starting next month, the company announced today.
The new service will measure a funds after-tax performance upon a variety of factors that impact tax performance, said Eric Almquist, VP of institutional business with Lipper. Lipper will measure tax performance using criteria such as the amount of dividend income paid to investors, return of capital and short- and long-term capital gains, he said.
The company will target its existing client base with the new service, but will also begin marketing to smaller firms that may not have the resources to calculate after-tax performance, he said. "Out of 650 odd fund companies over half of them are small," he said. "Its a market that we havent penetrated."
Almquist declined to say how much the service would cost, but said the price is comparable to Lippers other data products.
Lippers move coincides with a Securities and Exchange Commission deadline requiring some funds to report after-tax performance. By October, funds that market themselves as tax efficient must comply with the new SEC regulations while all other funds must be in compliance beginning February 2002.
The SEC adopted an after-tax reporting rule last year requiring funds to report their after-tax performance using the highest income bracket.
The firm will include the information in its fund evaluation products and data feeds, allowing fund companies, financial planners and brokerages to compare funds after-tax performance for a hypothetical investors taxable account.