A friend asks you to help her decide between two actively managed funds $($F and V$).$ Your friend is convinced that both managers have superior stock picking ability and prefers to rank funds based on their tax efficiency. Fund F has $$289$ million of assets under management and Fund V has $$653$ million under management. Furthermore, Fund F had security sales of $$37$ million over the past $12$ months and Fund V had sales of $$569$ million. Which fund is more tax efficient? Why

is tax efficiency an important factor to consider for an investor in active portfolios?

please show any work and explain