middle easten
Expenses and dividend taxes affect European index fund and ETF returns

Expenses and dividend taxes affect European index fund and ETF returns

25-01-2010 | Research

European index funds and exchange-traded funds underperform their benchmarks by 50 to 150 basis points per annum.

  • David Blitz
    David
    Blitz
    Head of Quant Research
  • Laurens Swinkels
    Laurens
    Swinkels
    Researcher

The explanatory power of dividend withholding taxes as a determinant of this underperformance is at least at par with fund expenses. Dividend taxes also explain performance differences between funds that track different benchmarks and time variation in fund performance. Our results imply that not only fund expenses, but also dividend taxation can result in a substantial drag on the performance of mutual funds.

Stay informed on our latest insights with monthly mail updates
Stay informed on our latest insights with monthly mail updates
Subscribe
Download the full study Expenses and dividend taxes affect European index fund and ETF returns
Subjects related to this article are:

Related articles

See all

Disclaimer

Robeco Institutional Asset Management B.V. (DIFC Branch) is regulated by the Dubai Financial Services Authority (“DFSA”) and only deals with Professional Clients and Market Counterparties, and does not deal with Retail Clients as defined by the DFSA.

Neither information nor any opinion expressed on the website constitutes a solicitation, an offer or a recommendation to buy, sell or dispose of any investment, to engage in any other transaction or to provide any investment advice or service. An investment in a Robeco product should only be made after reading the related legal documents such as management regulations, prospectuses, annual and semi-annual reports, which can be all be obtained free of charge at this website and at the Robeco offices in each country where Robeco has a presence.

Please confirm that you are a professional investor and/or institutional investor and that you have read, understood and accept the terms of use for this website.

I Disagree