Investors are hungry for tax loss harvesting opportunities as the 60/40 portfolio has taken hit after hit. With non-transparent strategies seeing a jump in performance over the last month, here are three non-transparent, tax loss harvesting ETFs that could make for exciting plays as the year winds down.
The Fidelity New Millennium ETF (FMIL)
Fidelity’s FMIL isn’t just the best-performing non-transparent ETF YTD, with the only positive returns in that period at 2.5% YTD. FMIL is also in the top three for performance over the last month with 12.3% in returns.
Launched in 2020, the active strategy invests in global stocks that might benefit from long-term changes in the marketplace. Thanks to its non-transparent approach, it’s been able to guard its secret sauce from competitors for its ambitious strategy, which can be compared to a broad index ETF like the Vanguard Total World Stock ETF (VT). VT returned -16% YTD compared to FMIL’s 2.5, and has outperformed the big market index VT by 0.6% over the last month.
FMIL also welcomed in $25 million in flows over the last three months, all for just 59 basis points which compares relatively well to other active strategies.
The T. Rowe Price Dividend Growth ETF (TDVG)
TDVG leads among all other non-transparent ETFs with the largest YTD flows, taking in $99 million so far this year. The top three non-transparent ETFs by YTD flows were all by T. Rowe Price, in fact, with the third seeing $50 million in YTD net inflows.
TDVG has kept its momentum going, also leading in four-week flows with $17.2 million. The ETF only discloses actual fund holdings 15 days after each quarter end, with its management team actively choosing stocks with competitive dividend yields and current or potential above-average earnings and dividend growth as well as attractive valuations.
Charging 50 basis points, it falls in line with FMIL for fee cost broadly speaking, returning 4.7% over one week and 10.6% over one month.
The American Century Focused Large Cap Value ETF (FLV)
FLV offers a particularly interesting set of factors for investors looking for tax loss harvesting ETFs. Charging the lowest fee among all non-transparent ETFs according to VettaFi at just 42 basis points, FLV also has the second-best YTD returns at 0.62%.
FLV’s large-cap value strategy also places it in competition with some of the bigger large-cap value indexed strategies, but its active approach and guarded moves could make it an attractive option. Whether value is truly back on the menu or not, investors may want to keep an eye on FLV, which added $2.2 million over the last four weeks in net inflows.
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