Taxes

The Goldman Sachs ActiveBeta Emerging Markets Equity ETF (NYSEarca: GEM), a relatively new player in the emerging markets exchange traded fund space, has quickly caught the eyes of institutional investors. GEM, which first began trading in September, has grown to $552.3 million in assets under management after attracting $375.6 million in net inflows this month, […]

Those who were a little off with their investment timing this year can still find a silver lining by utilizing a number of similar asset-class exchange traded funds to implement a tax loss harvesting strategy. For instance, the MSCI EAFE Index, which tracks developed Europe, Australasia and Far East, has declined over 5% in the […]

Exchange traded funds have been lauded for their efficiency and tax benefits but that there are still some exceptions to the rule. ETFs are typically seen as more tax efficient than mutual funds due to their structure. Mutual fund managers may buy or sell components to take a profit or meet redemptions from shareholders, which […]

Many investors have added exchange traded funds to their investment portfolios for a number of reasons, such as the tax benefits of the ETF structure. ETFs, like mutual funds, hold a basket of securities and reflect the performance of their underlying holdings. However, when mutual fund managers rebalance their portfolios, they accrue capital gains that […]

Investors interested in filling out their portfolio should consider diversified and tax-efficient exchange traded funds as an investment vehicle to help maximize potential returns and minimize costs. When it comes to investing, taxes will be the largest factor that weighs on long-term investments. For instance, a stock investor may opt to hold onto their long-term […]

If you are still scrambling to get your tax filings ready for Uncle Sam, be sure to remember that commodities-related exchange traded fund positions are not taxed liked other assets. ETFs track a basket of securities, and investors are taxed based on the type of underlying assets they are exposed to. Most investors will file […]

With over $2 trillion in assets under management, the U.S. exchange traded fund industry shows no signs of slowing as investors increasingly turn to the ETF investment vehicle for their portfolio needs. ETFs offer low costs, transparency and greater liquidity and tax advantages than mutaul funds, writes Jon Stein, founder and CEO of Betterment, for […]

More are taking a shine to passive, index-based exchange traded funds as disillusioned active mutual fund investors become fed up with underperforming assets and a large tax bite. Many mutual fund investors with taxable accounts are discovering that their active funds realized significant capital gains that need to be paid taxes on, reports Kelley Holland […]

Exchange traded funds are touted for their tax efficiency. Nevertheless, while the majority of ETFs operate without a hitch, some ETFs can on occasion issue capital gains distributions. “ETF sponsors anticipate capital gains distributions from just a small minority of funds,” according to Morningstar analyst Robert Goldsborough. These few ETFs that issue capital gains distributions […]

Instead of watching costs eat away at a portfolio’s overall returns, fund investors can cut down their fees and taxes through cheap and efficient exchange traded funds. Index-based ETFs passively track an underlying benchmark, and since there are no managers actively monitoring stock trades, these passive ETFs come with low fees, with some of the […]

Investors enjoy the greater tax efficiencies offered by exchange traded funds, but not all products are created equal. Specifically, master limited partnership ETF investors need to be aware of special tax considerations that could affect returns. Michael Iachini, managing director of ETF research at Charles Schwab Investment Advisory, warns that most MLP-related ETFs are structured […]

Political stalemate on Capitol Hill has frustrated the markets, but for municipal bond exchange traded funds, the bickering weakens any chance of a tax-code overhaul in tax-exempt munis. Morgan Stanley Wealth Management’s John Dillon and Matt Posner, who follows federal policy for Municipal Market Advisors, point out that next year’s congressional elections and political posturing […]

I do the “ETF of the Week” for MarketWatch every Thursday on Chuck Jaffe’s MoneyLife Show where I highlight big movers and disappointments within the exchange traded fund market. This week, in a shift from the normal program, I looked at how investors can make their investment portfolio work harder and more efficiently through a […]

Exchange traded funds are lauded for their tax efficiency, and as we head toward the end of 2013, only a fraction of fund products are expected to make capital gains distributions. Most ETFs redeem securities “in-kind,” or swap securities for securities, unlike mutual funds, which typically redeem shares by selling securities. [In-Kind Creations and Redemptions] […]

As December draws to a close, investors are mulling over their taxable investment accounts to assess capital gains for the year. While exchange traded funds are a tax efficient vehicle, investors shouldn’t skimp on researching options as there are subtle differences in the tax code for varying structures. First off, ETFs are generally more tax […]

I don’t know about you, but for me, paying taxes feels like a giant slap in the face. I’m minding my own business, feeling good about what I earned during the year, and then all of a sudden, out of nowhere, SLAP!  It physically hurts. So I try to do everything I can to minimize […]

Apple (NasdaqGS: AAPL) has faced intense scrutiny lately over using foreign subsidiaries to cut its U.S. income taxes. Of course, no one likes to pay taxes, which is why the tax efficiency of stock ETFs versus mutual funds is a key selling point. The tax advantages of ETFs stem from how the exchange-listed financial products […]

Exchange traded funds that follow master limited partnerships, or MLPs, have been a popular draw for investors looking for attractive yields and an alternative energy sector play. Nevertheless, MLP ETFs come with their own quirks. The Alerian MLP ETF (NYSEArca: AMLP), which comes with a 5.71% 12-month yield, has gained 14.4% year-to-date. AMLP has amassed […]

Exchange traded funds are touted for their tax efficiency. Nevertheless, not all fund products are created equal, and investors should be aware of the varying tax consequences for different investments. For instance, Micahel Rawson, ETF analyst with Morningstar, points out that certain asset classes are better of in tax-deferred accounts, such as ETFs that focus […]

While the payroll tax hike in the New Year’s deal to avoid the fiscal cliff has received a lot of attention, investors may also want to pay attention to another lesser known federal tax increase that went into effect in early January. The little known Obamacare provision – – known colloquially as the health care […]

Tax efficiency is one of the key benefits of exchange traded funds, but most investors would probably be hard-pressed to explain the details of how stock ETFs pull off this advantage. The answer has to do with how ETFs are traded between investors. Their tax efficiency is also related to how ETFs create and redeem […]

Master limited partnership exchange traded funds are garnering more attention as a way to access the booming energy industry with attractive yield opportunities. Nevertheless, potential investors should be aware of how the funds work. MLPs offer high yields because of their partnership structure, which does not require tax on the entity level, leaving the companies […]

Exchange traded notes would lose a key tax benefit under a proposal from House Republican Dave Camp of Michigan, according to a Bloomberg News report Wednesday. Camp wants to require mark-to-market taxation of derivatives. “Through that system, ETN holders would determine the products’ value each year and pay taxes at ordinary income rates on any […]

Ongoing talks over the so-called fiscal cliff and speculation of removing the tax-exempt status on municipal bonds has pressured muni bonds and exchange traded funds, although they recovered somewhat last week. ETFs such iShares S&P National AMT-Free Municipal Bond ETF (NYSEArca: MUB) fell hard in mid-December but have bounced a bit recently. [Muni Bond ETFs: […]

Considering that the year is quickly ticking away,  investors can shift positions in exchange traded funds to minimize their tax liability for the current year. For instance, some investors have utilized a popular tax planning strategy with ETFs where they would sell certain positions within an investment portfolio at a loss to offset realized gains […]

Exchange traded funds are touted for their tax efficiency. However, some funds may come with unrealized capital gains even if investors think they are safe and haven’t made any ETF sales this year. According to a recent BlackRock study, around 55% of investors don’t realize that ETFs could pay capital gains even though the security […]