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White Papers
After-Tax Returns

Taxable investors should consider the impact of excess return expectations, fees, and tax drag on their portfolios. A diversified mix between active, passive, and tax-managed equity strategies can lead to superior after-tax returns.


This white paper summarizes Canterbury’s views on constructing equity portfolios while considering tax implications. We consider the excess returns from different asset classes, tax drag, and ways to maximize after-tax performance.

Active Management Excess Returns

The search for managers who can outperform their benchmarks on a net-of-fees basis is a process that requires much due diligence and monitoring. In the pursuit of strong management teams, we have found that certain asset classes have been more likely to beat their respective benchmarks. The table below is broken down by asset class and shows the average active manager’s 10-year annualized excess return after fees for the period ending March 2017. U.S. value managers fared better against their benchmarks, as shown by their excess returns. On average, large value and small value managers beat their benchmarks by 1.39% and 3%, respectively.


Read Canterbury's white paper on After-Tax Returns