FYI: On an annual basis, investors are reminded that ETFs are a highly tax-efficient vehicle compared to mutual fund alternatives.
But while people tend to think of the tax benefits of low-turnover S&P 500 or MSCI EAFE index-based ETFs that have limited portfolio shifts, smart beta and actively managed ETFs are similarly strong options for taxable accounts.
We published a thematic research report highlighting how common it is for mutual funds, such as the USAA Growth Fund (USAAX) or the Goldman Sachs Growth Opportunities Fund (GGOAX) to pass to shareholders tax bills of 20% (or sometimes much more) of their fund’s net asset value (NAV). Yet the tax situation is very different with ETFs.
Regards,
Ted
https://www.etf.com/sections/blog/etf-cap-gains-perspective
