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…]
Innovation in the bond ETF space in recent years has been truly impressive, resulting in the introduction of a number of products that allow investors to fine tune their fixed income exposure. While the most popular bond ETFs are those that offer broad-based exposure to a variety of issuers and maturities (such as AGG or [...]
As investors have become more comfortable with the marriage of fixed income exposure and the ETF wrapper, billions of dollars have flowed into bond ETFs in recent years. Impressive innovation in the space has provided investors with more options than ever before, including enhanced granularity in virtually every corner of the fixed income market. Still, [...]
In recent years, investors have grown increasingly comfortable with the thought of achieving their fixed income exposure through ETFs. Through the first six months of 2010, bond ETFs had seen cash inflows of more than $18 billion, nearly half of the total for the ETF industry as a whole. Many of the most popular bond [...]
Fixed income ETFs have been one of the hottest growth areas in a rapidly-expanding industry. According to the ETF screener, there are now more than 100 bond ETFs available to U.S. investors, a significant increase from just one year ago. At the end of February, bond ETF assets totaled about $107 billion, an increase of [...]
PIMCO, the bond fund giant that has quickly become a major player in the fixed income ETF space, is looking to expand its ETF presence even further. The Newport Beach, California-based firm has filed for SEC approval on six new bond ETFs, including:
State Street has filed for SEC approval on the Barclays Capital International Corporate Bond ETF (IBND), which could become the first U.S.-listed ETF to track the performance of the investment-grade corporate sector of the global bond market.
State Street has become the latest ETF issuer to jump in on the corporate bond ETF boom, launching the SPDR Barclays Capital Short Term Corporate Bond ETF (SCPB) on Wednesday. SCPB will be linked to the Barclays Capital U.S. 1-3 Year Corporate Bond Index, a benchmark that measures the performance of investment grade corporate debt [...]
