Trudy R. Turner knows that everyone wants to lower risk and pay less in taxes. Meeting those goals isn’t easy, but Turner, a director at Robertson, Griege & Thoele, a fee-only financial planning and investment management firm, has some intriguing ideas.
Turner specializes in complex tax issues and financial planning. A financial services expert for 15 years, she has a bachelor’s degree in commerce from the University of Virginia and a master’s in accountancy with a specialization in taxation from the University of North Texas. She works in RGT’s Dallas office. Turner says that one of RGT’s goals is to lower client anxiety about domestic and global debt affecting portfolios and to increase investment income without raising tax liability. Because of the 2010 Patient Protection and Affordable Care Act, in 2013 a Medicare tax will apply to taxpayers who have modified adjusted gross incomes exceeding $200,000 (single) or $250,000 (joint). These high-income earners will pay an added 3.8% on net investment income (but not all investment income) and an additional 0.9% on wages and self-employment income. In light of these tax concerns, Turner has selected the funds discussed below: a global bond fund, a blended fund, and a tax-free bond fund.
1) TEMPLETON GLOBAL BOND FUND A (TPINX) Turner sees this fund as a triple play: It offers income, global diversity, and hedge protection. This high-yield fund invests in the sovereign debt of countries that need liability financing. Its holdings are in Korea, Poland, Hungary, and other countries that have admirable balance sheets and even surplus budgets. This world bond fund is best kept in tax-deferred vehicles such as traditional and Roth IRAs. Turner says the fund “provides attractive current income and also allows investors to hedge their U.S. dollar exposure from possible devaluation.” There is one caveat: The fund is potentially vulnerable to interest rate fluctuations.
Total fund assets: $61 billion
One-year return: -5.70%
Three-year return: 6.76%
Five-year return: 7.99%
Minimum taxable investment: $1,000
Expense ratio: 0.88%’
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