MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication
an InvestmentWires' Publication
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MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication |
|
Wednesday, January 24, 2001 Does After-Tax Reporting Matter? Confluence Technologies has answered the SEC's new after-tax reporting rule with a service to provide the new figures. The function is built in as a component of FundStation.net, the company's Net Asset Value (NAV) calculating and distributing service. The data can be distributed along with NAV's through FundStation.net. "It's frankly a kind of intense and esoteric sort of calculation," said Kirk Botula, vice president of the Pittsburgh-based company. For that reason, firms may well be inspired to outsource the task. The After Tax Returns service costs $120,000 to $250,000 per fund firm. We know funds are going to have to either pay the piper or do the calculations on their own, but what else? Although funds are required to report the after-tax figures in prospectuses, the information is optional in advertising. So, how much can this really matter? "It will become a point of product differentiation," explained Botula. With consumer tax awareness on the rise, the issue has become even more salient. He asked, "What can be more important to an investor than the actual return, which is the after-tax return?" Who is going to rise to the top in this slightly-altered market environment? "Index funds will look very attractive under this model," surmised Botula. "There will be people who will figure out how to specialize in it by niching in this area." While Botula admitted that the new rule won't change the face of the mutual fund industry, he contended that the move forces further segmentation of a market which is often criticized for homogeneity. Like other performance figures, after tax performance can serve as a marketing tool, but whether it becomes a market-driving or market-altering force remains to be seen. Printed from: MFWire.com/story.asp?s=26364 Copyright 2001, InvestmentWires, Inc. All Rights Reserved |