Tax Day Is Here. How to Pocket More of Your Portfolio's Return, According to Bank of America

Bank of America’s research shows a tax‑aware portfolio (60% stocks, 40% bonds) outperformed a tax‑insensitive counterpart, delivering a 7.4% post‑tax annualized return versus 5.9% over 30 years. The firm recommends three tax‑efficiency levers for investors: favoring share buybacks over qualified dividends, allocating to municipal bonds for tax‑free yields, and holding master‑limited‑partnerships (MLPs) directly to capture return‑of‑capital benefits. These tactics aim to generate “tax alpha,” an extra boost to net returns after tax drag is minimized. The guidance arrives as taxpayers scramble to meet the April 15 deadline and look ahead to 2026 tax planning.

Source: CNBC – ETFs