I just read this:
"You also need to be cautious of actively-managed mutual funds because they are trying to "beat the market" by buying and selling stocks or bonds. So they can generate excessive capital gains compared to passively-managed funds.
Therefore, the funds that are tax-efficient are generally ones that are growth-oriented, such as small-cap stock funds, and funds that are passively-managed, such as index funds and Exchange Traded Funds (ETFs)."
So if my mutual fund gives me a 3% return and my ETF gives me a higher return (which is very likely), why is the ETF still more tax efficient? My return is higher, therefore my gain is higher and I should pay more taxes. What do I not get about this?
Submitted November 19, 2017 at 10:39AM by clarkhennels http://ift.tt/2B2deEi
