As a way to make meet the regulatory rules, many financial advisors utilize the tax-loss harvesting strategy featuring ETFs that track the same market segment but pegged to different indices.
For instance, the ProShares MSCI EAFE Dividend Growers ETF (NYSEArca: EFAD), which follows the MSCI EAFE Dividend Masters Index and includes developed market EAFE companies that exhibit a minimum dividend increase streak of 10 years, may be a used as a suitable ETF alternative to MSCI EAFE Index funds for a tax-loss harvesting strategy.
According to ProShares, EFAD may act as an alternative to other U.S. open ended foreign large-blend or U.S. ETF foreign large blend categories.
For more information on ETFs and taxes, visit our taxes category.
Max Chen contributed to this article.