Lecture: Investment Taxation and Portfolio Performance
Jeffrey Pontiff, Associate Professor at Boston College will be the guest speaker at this week's Finance Seminar Series. He will be speaking about his paper "Investment Taxation and Portfolio Performance" All are invited to attend.
Information about Jeffrey Pontiff
Abstract
Most financial research mistakenly assumes that growth/value and market capitalization
portfolios command similar tax burdens. The ability to defer capital gains creates more heterogeneity in after-tax returns then previously recognized. We use the 1926 to 2002 Federal Tax code to generate tax-optimized after-tax returns that investors at different income levels would have realized on a set of benchmark portfolios. For an investor at the 95% income level, the historical tax cost of holding SMB and HML is, respectively, almost 3 and 17 times greater than the cost on the market premium.
Click here to view "Investment Taxation and Portfolio Performance" in Adobe PDF format
Click here to find out more about the Finance Seminar Series.
