What is Tax Drag?
Tax Drag The negative effect of taxes on portfolio returns, reducing the investor’s after-tax performance due to realized gains, dividends, or interest.
Source: CFA Institute, IFRS Foundation, FASB (GAAP), Basel III Framework
How is “Tax Drag” Used in Practice?
Tax drag can erode long-term returns, especially in jurisdictions with high capital gains or dividend taxes.
Certification Exam Relevance
Who Needs to Know This Term?
- Financial Analysts
- Bankers
- Traders
Learn “Tax Drag” Free with Termify
Master Tax Drag and 4,071+ professional terms with native pronunciation, IPA transcriptions and career quizzes. 100% free, forever.
Download Free for iOSFrequently Asked Questions
What is Tax Drag?
The negative effect of taxes on portfolio returns, reducing the investor’s after-tax performance due to realized gains, dividends, or interest.
Where can I learn this term for free?
Termify is a 100% free professional English app that teaches Tax Drag and 4,071+ other industry terms with native pronunciation, IPA transcriptions and career quizzes. Available on iOS in 23 languages. No subscription, no credit card required.
Last updated: