Index Mutual fund or ETF?

I’m not asking for investing advice. If you’re going to choose between an S&P500 index mutual fund or ETF, which is typically the most tax-friendly in a taxable account?

–fleg

If you’re going to choose between an S&P500 index mutual fund or ETF, which is typically the most tax-friendly in a taxable account?

ETFs are generally more tax efficient and generally have slightly lower expense ratios than a comparable mutual fund. https://www.etf.com/etf-education-center/etf-basics/what-is-…

AJ

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ETFs can still have unexpectedly large distributions. Some tracking of pending distributions is still needed.

Assuming that history predicted the future distributions tripped me up on an ETF in 2020. It would have been more tax efficient for me have sold it before the ex-dividend date making the pending distribution capital gains instead of a dividend.

Why? The dividend is qualified and taxed at capital gains rates.

Why? The dividend is qualified and taxed at capital gains rates.

I have a carry forward capital gains loss mostly from sale of inherited home.

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“Why? The dividend is qualified and taxed at capital gains rates.”

Your mileage will vary but few of my ETF dividends are qualified.

ETFs can still have unexpectedly large distributions.

This was more often true for me from mutual funds than ETFs and why I haven’t owned mutual funds outside of retirement accounts in a very long time.

With the pandemic downturn many TAXFREE ETF’s are paying over 5% currently. Here’s some monthly payers.
PML 6.53%,
NMZ 6.38%,
NVG 5.57%,
NEA 5.06%

Russ

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