Tax Efficiencies With ETFs
In this brief podcast, our Director of Research, Jeremy Schwartz, discusses the tax advantages of ETFs and related issues. Talking taxes underscores some of the advantages of exchange-traded funds (ETFs) compared to mutual funds. In fact, tax efficiency has been one of the primary advantages of ETFs since the industry started over 20 years ago.
Recorded on March 20, 2017
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Neither WisdomTree Investments, Inc. nor its affiliates, nor Foreside Fund Services, LLC., or its affiliates provide tax advice. All references to tax matters or information provided on this site are for illustrative purposes only and should not be considered tax advice and cannot be used for the purpose of avoiding tax penalties. Investors seeking tax advice should consult an independent tax advisor.
Authorized participant (AP): An entity, usually an institutional investor, that submits orders to the ETF for the creation and redemption of ETF creation units.
Capital gain: Positive difference between the sale price of an asset and the original purchase price.
Creation and Redemption Process: The process whereby an ETF issuer takes in and disburses baskets of assets in exchange for the issuance or removal of new ETF shares.
Currency Hedging: Strategies designed to mitigate the impact of currency performance on investment returns.
Rebalance: An index is created by applying a certain set of selection and weighting rules at a certain frequency. WisdomTree rebalances, or re-applies its rules based selection and weighting process on an annual basis.
Underlying basket: securities held by a fund to replicate an investment strategy or index.
U.S. Treasury Bonds: a debt security issued by the United States government.