I have Vanguard Wellington in a taxable account. Yes I get a tax bill at end of year. What Vanguard fund should I exchange to, to avoid the tax bill? Balance is around 150k. thanks
Potentially yes, however the concept behind index funds (the fact that they follow an index that does not change) means there is no buying and selling. Unless the index changes which is usually rare.
I guess you'll find out when you get your 1099...:) I don't know how often they are rebalancing or trading but if they're trading then it's more like a mutual fund. If it quacks like a duck. It's more a philosophy, if you think that money managers can't properly time the market and know what stocks to pick and sell and the time to do it then go with an ETF. You can't argue with the performance of ARKK but you can't always pick the best performer either.
You should be good to buy this. The prospectus for the ARK ETF Trust states: TAX-ADVANTAGED PRODUCT STRUCTURE Unlike many conventional mutual funds which are only bought and sold at closing NAVs, Shares of each Fund have been designed to be tradable in a secondary market on an intra-day basis and to be created and redeemed principally or partially in-kind in Creation Units at each day’s market close. These in-kind arrangements are designed to mitigate adverse effects on a Fund’s portfolio that could arise from frequent cash purchase and redemption transactions that affect the NAV of the Fund. Moreover, in contrast to conventional mutual funds, where frequent redemptions can have an adverse tax impact on taxable shareholders because of the need to sell portfolio securities which, in turn, may generate taxable gain, the in-kind redemption mechanism of a Fund, to the extent used, generally is not expected to lead to a tax event for a Fund or its ongoing shareholders.
I'm not aware of ANY mutual fund that doesn't kick off capital gains. Even a Municipal bond fund in your state kicks off capital gains. The whole idea behind mutual funds is the fact that a manager is buying and selling all year in order to beat some bench mark.
@@hgt2008 I would..it's not only capital gains but also just the yearly fees to belong inside mutual funds. If you look close enough though, often low volume Fidelity funds will act (and cost) just like an ETF portfolio.