Mutual Fund Moves

Michael Sheehan

Physician's Money Digest, January15 2004, Volume 11, Issue 1

If your fund family is one of thoseembroiled in the current ethics furor, youmay be tempted to sell. Before you takethat step, make sure you understand thetax implications of any trades. If sellingyour mutual fund shares puts short-termcapital gains in your pocket, you could betaxed up to 35% on the profit. Long-termcapital gains would be subject to a tax of5% to 15%. Also, if you paid a front-endsales load to get into the fund, or wouldpay a redemption fee to get out, youmight be averse to selling shares, especiallyif you have to pay additional fees to putyour money into another fund. Once youadd up the costs, you may find the priceof a clear conscience is too steep.