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Wall Street Will Make Money From Higher Taxes: Street Whispers

NEW YORK (TheStreet) --With all the bigwigs on Wall Street who voted for Romney and watched him lose worrying about the extra tax burden they may face in 2013, doesn't it just turn your heart into warm egg nog thinking about a way to make money off of this trend?

If so, shares of Eaton Vance (EV) may be worth a look. The money manager "is one of the leading providers of tax-managed funds," according to a recent report from RBC Capital Markets analyst Bulent Ozcan, in which the analyst raised Eaton Vance to "outperform" from "sector perform."

"We think the likelihood of higher taxes presents a growth opportunity for years to come. Investors could increasingly focus on the effect of taxes on investment returns and seek vehicles to decrease the impact of higher taxes," the report states.

In addition to the tax issue, Ozcan said in an interview Monday he likes Eaton Vance because he believes the company has been taking a proactive stance to try to compete with the threat from exchange traded funds, by becoming more of a "solutions provider," instead of chasing what can be elusive performance targets. By contrast, performance-oriented fund companies such as Waddell & Reed Financial (WDR), Legg Mason (LM) and Janus Capital Group (JNS) continue to "stick to their guns," trying to recapture past glory years.

Ozcan notes that Eaton Vance is not unique in its solutions-oriented approach, as BlackRock Inc. (BLK) has also been pitching its talents in that arena. However, he sees relatively little overlap in potential clients between the two companies since Eaton Vance targets smaller financial advisors and BlackRock tries to attract large institutional clients.

-- Written by Dan Freed in New York.

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