FYI: ETFs are famous for their tax efficiency. In 2017, of the 145 funds constituting the top 80% of U.S. ETF assets, a mere five distributed capital gains. Tax efficiency plus low fees make ETFs attractive investment vehicles.
Yet it is entirely possible for an ETF to have low all-in costs, including trading costs, expenses, tracking difference and tax liabilities, but still leak cash. It happens when a portfolio manager with a complex mandate adopts a low-tracking-difference-oriented trading strategy. A “smart” strategy may well lose its edge when it hits the real world.
Regards,
Ted
http://www.etf.com/sections/features-and-news/leaving-cash-trading-floor?nopaging=1
