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…]
Online broker Firstrade has become the latest firm to roll out a commission-free trading platform in an effort to lure ETF investors. The firm announced this week that ten ETFs would be available commission-free on its platform, including funds covering a number of asset classes and strategies. The commission-free ETFs include six Vanguard ETFs, three [...]
After solid performances earlier in the week, U.S. equity markets tumbled in Thursday trading thanks to weakness in the health care sector and a surprise increase in jobless claims. The Dow sank by 24 points on the session while the S&P 500 and the Nasdaq both fell by two points on the day. Commodities reversed [...]
Last year was a good year for most asset classes, as investor portfolios continued to recover from the recent recession. The difference in performance between many comparable funds was significant, and many of the best performers of 2010 are relatively small funds that maintain considerably smaller asset bases than their more popular competitors. Below, we [...]
When rattling off the advantages that ETFs hold compared to traditional actively-managed mutual funds, most investors usually start with the issue of expenses. The easiest comparison to make involves expense ratios, the fees charged by ETF and mutual fund companies for investing in a product. Though some mutual funds offer single-digit expense ratios, most actively [...]
Despite yet another shaky start, U.S. equity markets managed to push higher throughout the day, climbing back up to breakeven levels to close out the week. Both the S&P 500 and the Nasdaq finished in positive territory, posting marginal gains while the Dow slid by a modest seven points on the day. Commodities also rose [...]
Concerns over the health of the global economy subsided as investors bought up equities across the board ahead of the Thanksgiving Holiday on Thursday. The Dow rose by 151 points while the S&P 500 and the Nasdaq jumped by 1.5% and 1.9%, respectively. While these moves offered a nice pre-holiday boost to many investors’ portfolios, [...]
U.S. markets plunged across the board, as rate hike fears in Asia compounded with Irish sovereign debt issues to spook American investors. The Dow and S&P 500 both tumbled by 1.6% on the day, while the the tech heavy Nasdaq was especially hard hit and slid by 1.8%. Commodity markets experienced yet another down session [...]
U.S. equity markets managed to hang on to slight gains despite an extremely up-and-down session, which had seen stocks retreat heavily at one point in the day before climbing back to close out the first week of November. The Dow and the Nasdaq both gained 0.1% on the day while the broad S&P 500 managed [...]
After a rough start to Tuesday trading, equity markets managed to squeak by with small gains to finish the day. The tech heavy Nasdaq led the way with a gain of 0.3% while the Dow and S&P 500 finished slightly ahead. Commodity markets were also flat on the day as gold and oil both finished [...]
After sharp gains on Friday, U.S. equity markets fell back on a rocky day of trading that saw stocks dip to start the week, then surge in afternoon trading, only to fall back once again to finish the session. The Dow dipped by 0.4% while the Nasdaq and S&P 500 fell by 0.5% and 0.6%, [...]
