1.   Another advantage of exchange funds is tax efficiency.

2.   Before buying, investors can check the tax efficiency of a fund they are considering at www.Morningstar.com, clicking first on total returns, then on tax analysis.

3.   Beginning in October, the new rule will require funds to back up all claims of tax efficiency.

4.   - Consider individual stocks for tax efficiency.

5.   But the Vanguard fund has above-average tax efficiency, while Columbia is below average, suggesting that Vanguard would be the wiser choice for a taxable account.

6.   Finally, there are a number of mutual funds that have as part of their mission to be managed with tax efficiency as a primary consideration.

7.   Its low turnover should enhance tax efficiency.

8.   Ms. Vos Sanders cautioned against generalizing about the tax efficiency of various styles of investing.

9.   Moreover, there is no clear pattern of tax efficiency among large capitalization or small-cap funds.

10.   Novakoff said his investment firm has been directing long-term investors toward these funds primarily because of their tax efficiency.