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…]
This year more than ever before, investors of all sizes are giving thanks for the tremendous expansion in the ETF industry in recent years. ETF assets continue to climb, even in challenging economic environments. And in many cases, the growth of this industry is thanks to an exodus of cash from traditional mutual funds to [...]
Most investors probably never expected that it would never come to this. With only days remaining until the day the government coffers supposedly go dry, a deal to avoid a default remains elusive (one would suspect the August 2 date is at least 72 hours or so in advance of a hard deadline). The back [...]
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 [...]
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 [...]
No matter where investors look in the developed world, the picture isn’t pretty. In the U.S. unemployment remains intolerably high, and uncertainty over the latest round of QE will continue to hang over stock markets. In Europe efforts to control surging deficits have been met with protests and public outrage, complicating the process of reeling [...]
The performances of global equity markets since the depths of the most recent recession have led many investors to a major revelation. Emerging markets are the key to the global economy; the developed world is really just along for the ride. Although China gets much of the attention from international investors, developing economies around the [...]
For investors looking to establish emerging market exposure, the economies of the BRIC nations are generally the default option. As growth has ground to a halt in the world’s developed economies, interest in emerging markets has surged and investors have begun digging deeper to uncover promising growth opportunities in the developing world. For those with [...]
One of the greatest spectacles in sports kicks off in South Africa over the weekend, with 32 countries gathering to compete in the final stages of the World Cup. Even the economists of the world have taken an interest in the upcoming matches; ABN Amro recently released a note predicting that the world economy would [...]
When the soccer World Cup kicks off in Johannesburg this weekend, it will mark the beginning of one of the most anticipated sporting events of all time. The month-long tournament will showcase the world’s finest athletes and most passionate fans on a global stage. But also on display over the next four weeks will be [...]
In recent weeks markets have encountered turmoil with prospects for growth around the world being slashed as debt issues in Europe weigh on investors. As investors continue to flee the euro, many are flocking towards the relative safety of the U.S. dollar, further driving up the greenback and dragging down commodity prices. In addition to [...]
