Is your alpha big enough to cover its taxes? A classic journal article, revisited
Still true, nearly 20 years later: The lack of tax-savvy among advisors hurts clients
Author Robert D. Arnott, Andrew L. Berkin and Paul Bouchey March 22, 2011 at 2:20 PM
John R
March 23, 2011 — 4:29 PM
A great piece of work. However the entire investment mgmt industry measures on pre-tax alpha and is rewarded for it. Perhaps this is due to the fact the relevance of the after-tax alpha changes for each investor – based on their tax rates and whether the fund is held in a taxable account or not. Pre-tax alpha is the only real common demoninator for all investors.
How do you change the context for just investors that hold funds in taxable accounts? Seems like an unlikely cause for the industry to take on. There would have to be some outside force, but it’s not clear what that would be.
