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I assume the managers of XMHQ have been selling some winners. The mid-year STCG distribution amounts to more than 4% of NAV while Income and LTCG are what I would expect. I have not had this happen to any of my ETF holdings. Others may have insights to share about the apparent inefficiency in XMHQ or why ETFs can run up one’s tax bill as OEFs can do.
@BenWP, XMHQ shows a very large dividend payment toady, 6/24. $4.58 per share. I noticed the drop in the market value in my account also at the start of the day and was a bit startled. But if you look at the ETF daily return, it is actually up about .9%. I think the drop in share price to compensate the distribution just hasn't caught up yet.
S&P MC 400 also had a rebalancing last week, but that is too soon to be reflected in XMHQ. But MFO Premium is showing significant redemptions in late-May (M* data under Performance isn't updated). So, that may explain its large distribution.
I have not looked into the fund rules (by prospectus) for syncing up with the index.
I expect passive ETFs to have cap gains of any kind when constituents get acquired or are otherwise eliminated (as a publicly trading co) between rebalancings / reconstitutions. I expect these ETFs to use APs to minimize cap gains. I get that sometimes the process is not available.
Today Invesco published its annual report on its ETFs. XMHQ sold Super Micro (SMCI) during the latest reporting period, so it is little wonder there was such a high STCG distribution.
Today Invesco published its annual report on its ETFs. XMHQ sold Super Micro (SMCI) during the latest reporting period, so it is little wonder there was such a high STCG distribution.
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I would check Invesco website for composition of distribution. M* says all income.
I have some of it in my taxable account.
I'm guessing some percentage would have been Super Micro, which graduated to the 500. There were probably others.
I'll grieve about it during the long winter nights.
But MFO Premium is showing significant redemptions in late-May (M* data under Performance isn't updated). So, that may explain its large distribution.
I have not looked into the fund rules (by prospectus) for syncing up with the index.
I expect passive ETFs to have cap gains of any kind when constituents get acquired or are otherwise eliminated (as a publicly trading co) between rebalancings / reconstitutions. I expect these ETFs to use APs to minimize cap gains. I get that sometimes the process is not available.
This will be my last post.
Seems like I remember Super Micro as the home-brew shop if you couldn't afford a server from one of the big names.
That's pretty far back in the rearview mirror.