2.5 – 3.0 percent

Fixed Income ETFs

0 – 0.15 percent

Equity ETFs

0.15 – 0.3 percent

Source: Morningstar data as of December 31, 2014

Part of this is due to the ETF creation/redemption process, which is more tax efficient than the cash subscription/redemption process used by most mutual funds. Additionally, a skilled ETF portfolio manager will work to minimize cap gains occurrences in the fund throughout the year.

Do you have any questions about bond ETF distributions? Ask them below.

Matt Tucker, CFA, is the iShares Head of Fixed Income Strategy and a regular contributor to The Blog. You can find more of his posts here.

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