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I've had several similar questions about Lipper's tax efficiency scores in the past, and since they don't explain them, I mostly use M*'s tax pages, which give you columns of data rather than just one unexplained rating number. The "tax cost ratio" M*calculates, tempered by "potential capital gains exposure," is a good starting point to make an informed judgement on tax efficiency. For example:
The tax-cost ratio of MPGFX doesn't look excessive for a stock fund, and it ranks in the top decile for tax-adjusted return. But the unrealized cap gain number is pretty big, so maybe that's where Lipper is getting the "1".
Comments
http://performance.morningstar.com/fund/tax-analysis.action?t=MPGFX®ion=USA&culture=en-US
The tax-cost ratio of MPGFX doesn't look excessive for a stock fund, and it ranks in the top decile for tax-adjusted return. But the unrealized cap gain number is pretty big, so maybe that's where Lipper is getting the "1".
http://www.lipperweb.com/research/TaxEfficiency.aspx