Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
M* discovers that ETFs are more tax efficient than mutual funds
Old 02-14-2006, 11:16 PM   #1
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,616
M* discovers that ETFs are more tax efficient than mutual funds

"Are ETFs Really More Tax-Efficient Than Mutual Funds?"

M*'s startling conclusion? "In most cases ETFs are more tax efficient than conventional mutual funds in the same asset classes or categories. Nevertheless, ETFs can surprise you."

Followed by: "Disclosure: Barclays Global Investors (BGI), which is owned by Barclays, currently licenses Morningstar's 16 style-based indexes for use in BGI's iShares exchange-traded funds. iShares are not sponsored, issued, or sold by Morningstar. Morningstar does not make any representation regarding the advisability of investing in iShares that are based on Morningstar indexes."
__________________

__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: M* discovers that ETFs are more tax efficient than mutual funds
Old 02-15-2006, 07:17 AM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2005
Posts: 8,615
Re: M* discovers that ETFs are more tax efficient than mutual funds

C'mon nords, you somewhat misrepresent what Mr Culloton wrote.* *Suppose I pull a couple of quotes from the article:

Quote:
Originally Posted by Culloton@Morningstar
For instance, Vanguard 500 Index's VFINX tax-cost ratios for the trailing one-, three-, and five-year periods ended Jan. 31, 2006, are lower than those of both of its ETF rivals: SPDR SPY and iShares S&P 500 Index IVV.
and

Quote:
Originally Posted by Culloton@Morningstar
Similarly, at the end of January, the five-year tax-cost ratios and tax-adjusted returns of traditional index funds such as the Schwab 1000 Index SNXFX and the TIAA-CREF Equity Index TCEIX were better than those of their ETF counterparts--iShares Russell 1000 Index IWB and iShares Russell 3000 Index IWV, respectively.
Anyways, Mr Culloton did not have any startling conclusions.
__________________

__________________
LOL! is offline   Reply With Quote
Re: M* discovers that ETFs are more tax efficient than mutual funds
Old 02-15-2006, 09:55 AM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Re: M* discovers that ETFs are more tax efficient than mutual funds

Hmmm...those were noted exceptions in the article.

A broader couple of quotes perhaps?

"Overall, the answer is yes. ETFs have been much more tax-efficient, as measured by Morningstar's tax-cost ratio, than the typical conventional mutual fund."

"These examples, however, may be exceptions that prove the rule: In most cases ETFs are more tax efficient than conventional mutual funds in the same asset classes or categories."

Sounds like a conclusion...how startling is up to the reader I guess.
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Re: M* discovers that ETFs are more tax efficient than mutual funds
Old 02-15-2006, 02:09 PM   #4
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,616
Re: M* discovers that ETFs are more tax efficient than mutual funds

OK, OK, I'm not trying to flog an agenda, it just seemed that M* was asking pretty ingenuous questions and then answering them with a lot of caveats. Almost as if they had to keep someone's ETF marketing staff happy.

You know, deadline journalism.
__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Re: M* discovers that ETFs are more tax efficient than mutual funds
Old 02-15-2006, 07:14 PM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Re: M* discovers that ETFs are more tax efficient than mutual funds

Oh the guy wrote the article, and then the politically savvy editor marked it up for him
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Cashing out home equity to invest in Mutual Funds ADJ FIRE and Money 83 05-10-2007 01:16 PM
International Currency ETFs vs Mutual Funds ESRBob FIRE and Money 1 04-28-2007 03:02 PM
Tax deferred Mutual fund account geeman Young Dreamers 17 07-13-2005 06:08 PM
Individual Stocks or Index Mutual Funds Beststash FIRE and Money 6 12-18-2003 10:58 AM
Lord Abbott Mutual Funds proud_texan FIRE and Money 2 10-03-2003 11:18 AM

 

 
All times are GMT -6. The time now is 09:37 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.