Tax Efficiency and ETFs

June 2009
Equities;Jun2009, Vol. 58 Issue 2, p44
The article focuses on the tax efficiency of exchange traded funds (ETFs). The factors that drive the ETF manager's ability to maintain tax efficiency include how often the portfolio is rebalanced and adjusted and the frequency of creations and redemptions directed to the ETF. An example illustrating the maintenance of tax efficiency in an ETF with a consistent amount of creation unit purchases and redemptions is presented.


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