This year’s bill will likely be higher for mutual fund investors, according to Keefe Bruyette & Woods’s Melissa Roberts, given that equity products are on track for a seventh straight year of outflows amid a robust rally.
“Within the mutual fund world, the capital gains are going to be higher this year because you’ve had this combination of persistent outflows and equity appreciation in the funds,” Roberts said. “Many of the funds are having to sell appreciated assets.”
Of course, a 3% slump in a bond ETF isn’t going to entirely neutralize the bill for any investor paying tax on a double-digit stock gain, Bartolini said. But amid a sea of green, it can help blunt some of the blow.
“These aren’t going to be gigantic losses, but in a world where everything has gone up, even a little bit of tax-loss harvesting can be helpful when you’re eyeing your overall tax bill,” Bartolini said.
This article was provided by Bloomberg News.