ETF Tax Efficiency
Taxable investors may prefer ETFs over mutual funds due to a regulatory loophole that shields investors from capital gains distributions until final sale of the ETF. As shown in the table below, many popular foreign and global ETFs have not ever paid capital gains distributions (at least from their 2007-2008 inception to Dec. 2011).
ETF Fees and Capital Gains Distributions
|
Benchmark |
iShares |
Vanguard |
||
|
MSCI ACWI Ex US |
MSCI ACWI |
FTSE All-World Ex US |
FTSE All-World |
|
|
Markets |
Developed & Emerging ex. U.S. |
Developed & Emerging |
Developed & Emerging ex. U.S. |
Developed & Emerging |
|
Inception |
3/26/2008 |
3/26/2008 |
3/2/2007 |
6/24/2008 |
|
Expense Ratio |
0.35% |
0.35% |
0.22% |
0.25% |
|
Cap. Gains Distributions |
0 |
0 |
0 |
0 |