Tax-cost ratios for mutual funds will often depend on the category of investment predominant within the portfolio. Typical tax-cost ratios for municipal bond funds are approximately 0.05%, but for the typical high-yield corporate bond fund it may be approximately 3.29%. Depending on the portfolio turnover rate, a fund can generate greater gains than other funds, even higher than 5% per year, so it is important to understand these costs before investing. It is important to note that under guidelines established by the SEC, after-tax returns for funds should be calculated based upon the highest taxable income brackets; if investors fall inside a lower tax bracket, their tax costs will be lower.