Avoiding the Mutual Fund Tax Time-Bomb

Jeff Brown, business columnist for The Philadelphia Inquirer, reporting for Knight Ridder Newspapers, proposes a strategy to help mutual fund investors avoid taxes from end-of-year mutual fund distributions in this article from MarketWatch via MENAFN. Brown suggests, "Consider investing in exchange-traded funds, which generally don't carry those hidden tax time bombs, " adding " ...exchange-traded funds, or ETFs... are index-style funds that trade like stocks. Initially, they are attractive because many have extraordinarily low fees -- even lower than those of ordinary index funds. But at this time of year, they are appealing because most have only infinitesimal distributions, or none at all. Partly, that's because of the low turnover due to their index-investing style."

(permalink)

(May '04-Jun '05)