Calculate after-tax TWR & ROI or Yield ?

[paul3nt]

Say I have 4 securities: a treasury bond, TRE, a muni bond from my home state, CAL, a national muni fund, MUNI, and a corporate bond CORP. How do I properly compare the the time-weighted returns from these? How do I compare the ROI or Yields from these ?

Can FM calculate the after-tax TWR's and Yield's ? If so how would I enter my federal marginal tax rate, my state marginal tax, and would FM properly calculate the combined tax rate = StateRate + FedRate*(1-StateRate) ?

Right now I am exporting the TWR's and Yield's to Excel, but I do not know how to do the after-tax calculation. An approximate solution is simply
Yield(TRE).aftertax = Yield(TRE)*(1-Fedrate); Yield(Cal).aftertax = Yield(Cal), Yield(MUNI).at = Yield(MUNI)*(1-StateRate), Yield(Corp).at = Yield(Corp)*(1-combinedTaxRate). This is only approximate, and would not work for TWR's ( I think).

[Mark]

Hi paul3nt,

To compare yields, create either an ROI Yield report, or a Time-Weighted Return report, and list by investment, so you see figures for each investment.

Fund Manager does not calculate your taxes. (It does calculate your gains/losses, but not the actual tax.) You can't enter tax rates, but if you want to include tax effects in your returns, record negative distributions for the taxes you paid. You could customize one of the distribution labels to be "Taxes Paid" or something. See "Options / Distribution Labels...".

[paul3nt]

Mark,

Thanks for the rapid reply. Creating a negative distribution, "Taxes Paid"
is a very good idea because it then allows FM to properly discount the taxes paid into the ROI and TWR calculations, say on a quarterly basis, and it avoids my approximate calculation.

Paul