“And in almost every case, the distributions are very small–much less than 1% of the affected funds’ net asset value,” Goldsborough added.
Bond ETF investors should anticipate a higher frequency of capital gains distributions. Bond ETFs saw heavy outflows this year, which required more selling, and bond ETF managers typically see higher turnover rates.
The largest ETFs with capital gains distributions include the Vanguard Total Bond Market (NYSEArca: BND), iShares Core Total Aggregate US Bond (NYSEArca: AGG), Vanguard Short-Term Bond (NYSEArca: BSV), SPDR S&P Dividend (NYSEArca: SDY) and Vanguard Short-Term Corporate Bond Index (NYSEArca: VCSH).
The ETFs with the largest cap gains include SPDR Russell Small Cap Completeness (NYSEArca: RSCO), SPDR S&P Pharmaceuticals (NYSEArca: XPH), SPDR Nuveen Barclays CA Municipal Bond (NYSEArca: CXA), SPDR S&P Software & Services (NYSEArca: XSW) and SPDR Nuveen Barclays NY Muni Bond (NYSEArca: INY).
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