The year-end periods provides the ETF industry with a couple of opportunities to flex its collective muscle; performance comparisons generally tend to favor those products with lower expense ratios–a defining feature of exchange-traded funds. But early January also puts another benefit of exchange-traded products into focus: enhanced tax efficiency relative to traditional mutual funds. The nuances of the exchange-traded structure have the potential to bring additional tax efficiencies to investors thanks to the availability of an “in kind redemption” that ultimately gives investors more control over the timing of tax obligations. Mutual funds, on the other hand, have a nasty tendency to stick remaining shareholders with tax liabilities incurred as a result of redemptions by others–a development that can obviously be undesirable [see Tax Loss Harvesting With ETFs: 6 Ideas To Lower Client Liabilities].
ETFs won’t allow investors to skip out on their taxes, but this product structure can deliver more control and greater efficiency in this regard. It is important to note, however, that not all ETFs are created equal when it comes to tax efficiency. Certain asset classes are less efficient than others; bond ETFs, for example, should be expected to incur capital gains taxes with some regularity.
Below, we run through the capital gains results for several of the largest ETF issuers, beginning with the market leader: [click to continue…]
Since PowerShares debuted its first active ETFs in the spring of 2008, this corner of the exchange-traded product market has grown tremendously. Though many active ETFs have been somewhat slow to accumulate assets, the increase in the size of the lineup highlights the trend towards vehicles that combine active management with the exchange-traded structure. There [...]
iShares, the largest issuer of U.S. ETFs that was acquired last year by BlackRock, has received SEC approval to introduce actively-managed ETFs. iShares currently offers more than 200 passively-indexes ETFs, and the recent SEC decision opens the door for the company to introduce exchange-traded products not linked to a specific benchmark. iShares ETFs had aggregate [...]
The ETF industry has grown by leaps and bounds in recent years, thanks in large part to a shift by investors towards cost-efficient passive indexing strategies and away from pricey active management. But many in the industry have opined that actively-managed ETFs–in a sense hybrid products that exhibit characteristics of both active mutual funds and [...]
The rise of the ETF industry has been truly remarkable in almost every way. A surge in product offerings has democratized asset classes and investment strategies previously available only to institutions and the super-rich. ETFs have been embraced as an efficient means of accessing everything from copper to Treasuries. And while the industry remains very [...]
To say opinions on the future of active ETFs are mixed would be a major understatement. Nearly two years after PowerShares launched its first line of active ETFs and a year after the much-publicized launch of the Grail American Beacon Large Cap Value ETF (GVT), active ETFs remain stuck in first gear. Investors have expressed [...]
The monthly data release of ETF trading data from the National Stock Exchange always provides a comprehensive industry snapshot, detailing fund flows, asset levels, and the latest update on an increasingly-competitive battle for market share. There is no shortage of number-crunching following each release, but most of the analysis focuses on high level industry trends, [...]
T. Rowe Price has filed with the Securities and Exchange Commission for approval to launch a line of actively-managed ETFs. In its filing for exemptive relief with the SEC, T. Rowe indicated that its initial fund would invest primarily in domestic fixed income securities, but that it could eventually launch domestic and international equity ETFs, [...]
Once considered a vital “return enhancer” in almost every portfolio, real estate as an asset class has fallen out of favor with investors following its spectacular collapse during (and role in causing) the recent global economic downturn. Real estate was historically embraced because of its potential for delivering excess returns in bull property markets and [...]
Earlier this year, best-selling author Harry Dent , Jr. ventured into the ETF industry, launching the Dent Tactical ETF (DENT) in a move that further blurred the lines between active and passive management. DENT is actively managed by a team of analysts using primarily economic and demographic analysis to determine the overall trend of U.S. [...]
San Francisco-based Grail Advisors is set to expand its presence in the actively-managed ETF space, introducing four actively-managed ETFs later this week: RP Growth, RP Focused Large Cap Growth, RP Technology, and RP Financials. The new funds will join Grail’s existing actively-managed ETF, the Grail American Beacon Large Cap Value ETF (GVT), which launched earlier [...]
