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In that example, presumably "moduspol mutual fund" would need to pay capital gains taxes.

• moduspol 9y ago
  Wouldn't its profits be coming from the fees it charges me, and not from the investments themselves? Do normal mutual funds pay capital gains taxes as the things they invest other people's money in are changed?
  • phil21 9y ago
    > Do normal mutual funds pay capital gains taxes as the things they invest other people's money in are changed? Yep! Tax efficiency of a mutual fund is quite an important factor to look at for your overall expenses as well. It's a large reason actively managed funds don't do as well as simple market-wide ETFs.
    • moduspol 9y ago
      Wow. TIL. Thanks!