The Tax Bill of ETFs and ETNs

With the tax deadline rapidly approaching, it is absoltuly essential that investors understand how their exchange traded funds (ETFs) and exchange traded notes (ETNs) will be taxed.

With the vast array of ETFs to choose from, taxes can get tricky. In general the tax treatment of ETFs is relatively simple and is applicable to long-term and short-term capital gains rules and rates. For example if one held the SPDY (SPY) for less than one year, any gains would be subject to short-term capital gains rates and if held for longer than one year, then the gains would be subject to long-term capital gains rates. Read more of this post

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How Uncle Sam Treats ETFs and ETNs

As the timer to file one’s taxes continues to tick away, it is important to understand how exchange traded funds (ETFs) and exchange traded notes (ETNs) can increase or decrease Uncle Sam’s portion of the pie.

With the vast array of ETFs to choose from, taxes can get tricky.  In general the tax treatment of ETFs is relatively simple and is applicable to long-term and short-term capital gains rules and rates.  For example if one held the SPDY (SPY) for less than one year, any gains would be subject to short-term capital gains rates and if held for longer than one year, then the gains would be subject to long-term capital gains rates. Read more of this post

ETFs and ETPs Pass $1 Trillion Mark

According to a study conducted by BlackRock, assets in US listed ETFs and exchange traded products surpassed $1 trillion for the first time on Thursday. 

Over the past year, ETFs have truly penetrated the investment world as both retail and institutional investors have turned to them to access hard to reach markets and add diversification to portfolios.  At the end of 2009, there were 772 US listed ETFs with assets of $705.5 billion from 29 different providers being offered on two exchanges.  So far, this year, 171 new ETFs have been launched in the US, 828 remain in the pipeline and 49 have been delisted.  As a result, there are currently 894 ETFs with assets of $887.2 billion from 28 providers on two exchanges and 185 ETPs, which includes ETNs, with assets of $115.5 billion from 20 providers on one exchange.  Read more of this post

Understanding How ETFs And ETNs Are Taxed

As the end of the year rapidly approaches, it is important to understand how Uncle Sam will treat one’s ETF and ETN holdings. 

With the vast array of ETFs to choose from, taxes can get tricky.  In general the tax treatment of ETFs is relatively simple and is applicable to long-term and short-term capital gains rules and rates.  For example if one held the SPDY (SPY) for less than one year, any gains would be subject to short-term capital gains rates and if held for longer than one year, then the gains would be subject to long-term capital gains rates. Read more of this post

The Tax Implications Of ETFs and ETNs

As with all other sources of income, income that is generated through exchange traded funds (ETFs) and exchange traded notes (ETNs) are subject to increasing an investor’s tax liability.  So one doesn’t get hit out of left field, here is a summary of how ETFs and ETNs are taxed.

With the vast array of ETFs to choose from, taxes can get tricky.  In general the tax treatment of ETFs is relatively simple and is applicable to long-term and short-term capital gains rules and rates.  For example if one held the SPDY (SPY) for less than one year, any gains would be subject to short-term capital gains rates and if held for longer than one year, then the gains would be subject to long-term capital gains rates.

It gets tricky when one starts dealing with commodities ETFs.  These ETFs shoot of Schedule K-1’s, which track the gains and losses of the fund for the year, because they are actually limited partnership interests in the fund.  For example, United States Oil (USO) is formed as a partnership interest, so those who own the ETF have a partnership interest in the fund and will receive a K-1 outlining gains or losses. Read more of this post

Emerging Markets and Precious Metals Lead August ETF Inflows

In a report released by independent investment research provider, Morningstar Inc. (MORN), asset outflows from domestic equity exchange traded funds (ETFs) contributed to net outflows of $1.3 billion from U.S. ETFs in August, ending a six-month streak of consecutive monthly inflows. Read more of this post

Three Quant ETFs Outperforming Their Respective Markets

Over the past few years, investors have been searching for investment tools that are “outside the box” to boost returns and add diversification, which has enabled quantitative exchange traded funds (ETFs) to grow at an exponential rate. 

In and of itself, the vast majority of ETF assets are still held in traditional beta funds which track well-known benchmarks like the S&P 500, the Russell 2000 or the MSCI Emerging Markets Index.  In fact, the SPDR S&P 500 (SPY), the iShares Russell 2000 Index (IYW) and the iShares MSCI Emerging Markets (EEM) continue to remain the most actively traded ETFs and make up a significant percentage of total assets that are invested in ETFs.

However, some ETF providers, like PowerShares, First Trust and Claymore have taken their offerings a step further by utilizing fundamental analysis and other quantitative methodologies to generate excess returns by identifying securities which are set to outperform the broader markets and experience above-average capital appreciation.  Read more of this post