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Consider an S&P 500 mutual fund. At any moment the holdings of the fund include unrealized cap gains that should eventually generate tax liability. Thus, for a potential investor, the fair value of the fund should equal to its NAV minus the expected cap gains tax liability.

Is there a way to approximately quantify this liability?

Note, we could easily compute the maximum liability, just multiply the cap gains by the investor's tax rate. But I guess the expected liability should be materially different.

P.S. For example current amount of unrealized cap gains in Vanguard SP 500 fund is 50%, which looks rather significant.

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