That could even include the distributions spun off by those inefficient funds. Exploit tax-sheltered accounts. Instead, you owe income tax when you withdraw cash. Investments nurtured in a Roth IRA will never face tax. Pick a yardstick.
Most fund managers focus on pretax returns.
Tax efficiency is the proportion of pretax returns that you keep after taxes are paid. After-tax return is your bottom line. It's how much money you have after taxes. Consider tax-efficient mutual funds. Screen for funds with such phrases in their names.