Short Takes: Evergreen Plans to Add 2d Tax-Managed Fund

Evergreen Funds, the $52 billion mutual fund unit of First Union Corp., Charlotte, will roll out its second tax-managed mutual fund shortly.

The Tax Strategies Equity Fund is designed to minimize capital gains taxes for investors, said Gordon Forrester, a senior vice president in charge of product development.

The fund is currently gathering assets and Evergreen plans to begin marketing the vehicle to Evergreen investors within several weeks, Mr. Forrester said. Evergreen has a balanced tax-managed portfolio, launched three years ago, that contains a mix of stocks and municipal bonds.

"Shareholders in the mutual fund industry have seen an increase in magnitude of capital gain distributions given the bull market over the last two to three years," said Mr. Forrester. He said he doesn't believe that will change because of the market's current volatility.

The new fund will buy mid-capitalized companies and try to avoid those that pay dividends to minimize investors' taxes, said Mr. Forrester. For example, the fund could buy companies that pay little or no cash dividends but offer dividend reinvestment programs or that buy back their stock instead of paying dividends, he said.

For reprint and licensing requests for this article, click here.
MORE FROM AMERICAN BANKER