Gold ETFs will be under 28% capital gain tax for collectibles. Not so for gold-mining ETFs.

I owned GLD in the past and SGOL now, but do not remember how any gains were characterized by Schwab. I am not sure Schwab has a separate "28%" capital gain section

@Derf - Good question. I was aware collectibles like rare coins and precious metals are subject to a higher (28%) tax. I hadn’t considered what happens when those assets appreciate within a fund. So I did a quick read.
Relevant excerpt #1: The final category of capital gains is collectibles. Collectible gains, the focus of this article, are subject to a maximum rate of 28%.
Relevant excerpt #2: Sec. 408(m)(2) defines a collectible as:
Any work of art;
Any rug or antique;
Any metal or gem;
Any stamp or coin;
Any alcoholic beverage; or
Any other tangible personal property specified by Treasury.
Prop. Regs. Sec. 1.408-10(b)5 expands the Sec. 408(m)(2) definition of a collectible to also include:
Any musical instrument; and
Any historical objects (documents, clothes, etc.).6
Relevant Excerpt #3: While it is clear that gold and silver coins are collectibles, what about bullion-backed precious metal exchange-traded funds (precious metal ETFs)? Are they also considered collectibles? Because precious metal ETFs (e.g., gold, silver, platinum, and palladium) are physically backed by precious metals such that each precious metal ETF share represents ownership in the underlying precious metal, precious metal ETF shares are considered to be collectibles. Examples of common gold ETFs include SPDR Gold Shares (GLD), iShares Gold Trust (IAU), and ETFS Physical Swiss Gold Shares (SGOL).
In brief, the article appears to say that yes, if held inside an etf (gains on) collectibles / precious metals would be taxed at 28%. There is a direct proportional relationship between a share of an etf and an underlying asset.
But PRPFX is a mutual fund (OEF) and that direct proportional relationship between fund shares and underlying assets does not exist. So shares of PRPFX should not be subject to any of the 28% tax on collectibles / precious metals. Of course, if held inside an IRA it shouldn’t make any difference anyway. In that case, a gold backed etf would not be taxed any differently.
Warning: I am not a competent tax advisor. Be sure to consult one when doing your taxes.

https://bilello.blog/2024/the-state-of-the-markets-october-2024
"High Yield Spreads are now at their tightest levels since June 2007 (2.89%) and Investment Grade Spreads at their tightest levels since March 2005 (0.83%). Bond investors are reaching for yield and behaving as if there will never be a default cycle again."
"Rents have been held down by a multi-family construction boom that significantly increased supply and is leading to the highest vacancy rates (6.7%) since 2020."
"And wage growth of close to 4% over the past year was 1.5% higher than the increase in CPI inflation. That was the 17th straight month in which wages outpaced inflation over the prior year, a great trend for the American worker that hopefully continues."

https://www.sec.gov/Archives/edgar/data/1396092/000199937124013654/clifford-497_102124.htm
497 1 clifford-497_102124.htm SUPPLEMENT DATED OCTOBER 21, 2024
Clifford Capital Focused Small Cap Value Fund
Investor Class (FSVRX)
Institutional Class (FSVVX)
Super Institutional Class (FSVQX)
Supplement dated October 21, 2024
to the Prospectus, Summary Prospectus and Statement of Additional Information,
each dated January 31, 2024
The Board of Trustees (the “Board”) of World Funds Trust (the “Trust”) has approved a Plan of Liquidation (the “Plan”) for the Clifford Capital Focused Small Value Fund (the “Fund”), which became effective on October 21, 2024. Clifford Capital Partners LLC (the “Adviser”) recommended that the Board approve the Plan due to a diminished asset base and correspondingly rising expenses of the Fund, which the Adviser has indicated that it is no longer willing to continue to subsidize. As a result, the Board concluded that it is in the best interest of the Fund’s shareholders to liquidate the Fund. The Fund is expected to liquidate on or about November 20, 2024 (the “Liquidation Date”).
Effective October 21, 2024, the Fund was closed to new and subsequent investments. Until the Liquidation Date, Fund shareholders may continue to reinvest dividends and distributions in the Fund or redeem their shares. Any remaining shareholders on the Liquidation Date will receive a distribution of their remaining investment value in the Fund based on the instructions listed on your account. The sale or liquidation of your shares will generally be a taxable event. You should consult your tax advisor about your tax situation.
As shareholders redeem shares of the Fund between October 21, 2024 and the Liquidation Date, the Fund may not be able to maintain its stated investment goal and other investment policies. Accordingly, the Fund may deviate from its stated investment goal and other investment policies during the period between October 21, 2024 and the Liquidation Date.
If you have questions or need assistance, please contact your financial advisor directly or the Fund toll-free at 1-800-673-0550.
This Supplement, the Fund’s Prospectus, Summary Prospectus and Statement of Additional Information provide relevant information for all shareholders and should be retained for future reference. The Fund’s Prospectus, Summary Prospectus and Statement of Additional Information have been filed with the Securities and Exchange Commission, are incorporated by reference, and can be obtained without charge by calling the Fund toll-free at 1-800-673-0550.

One of the stunning numbers in the Score Card is the FirstHand fund family. Its three funds have an average ER of -1.12.
The culprit is a CEF Firsthand Technology Value Fund SVVC with an ER of -7.21.
I checked with Lipper and their folks say it's correct, referencing this 10K filing.
To my knowledge, the fund appears to have lost nearly all its AUM since launching in 2011.
Still can't quite get my head around this.
Here's an excerpt:

NOTE 4. INVESTMENT MANAGEMENT FEE
The Company has entered into an investment management agreement (the “Investment Management Agreement”) with FCM pursuant to which the Company will pay FCM a fee for providing investment management services consisting of two components—a base management fee and an incentive fee.
The base management fee will be calculated at an annual rate of 2.00% of our gross assets. For services rendered under the Investment Management Agreement, the base management fee will be payable quarterly in arrears. The base management fee will be calculated based on the average of (1) the value of our gross assets at the end of the current calendar quarter and (2) the value of the Company’s gross assets at the end of the preceding calendar quarter; and will be appropriately adjusted for any share issuances or repurchases during the current calendar quarter. Base management fees for any partial month or quarter will be pro-rated.
The incentive fee is determined and payable in arrears as of the end of each calendar year (or upon termination of the Investment Management Agreement, as of the termination date), commencing on April 15, 2011, and equals 20% of the Company’s realized capital gains, if any, on a cumulative basis from inception through the end of each calendar year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid incentive fees, provided that the incentive fee determined as of December 31, 2023, will be calculated for a period of shorter than twelve calendar months to take into account any realized gains computed net of all realized capital losses and unrealized capital depreciation from inception. For the year ended December 31, 2023, there were no Incentive fee adjustments. For the year ended December 31, 2022, there were no incentive fee adjustments. For the year ended December 31, 2021, there were no incentive fee adjustments.
Effective September 30, 2023, the Company has entered into a fee waiver agreement with FCM (the “Fee Waiver Agreement”). Pursuant to the terms of the Fee Waiver Agreement, FCM agrees to (1) waive future accruals of the base management fee starting October 1, 2023, through December 31, 2024, with future recoupment to the extent permitted by the Investment Management Agreement, and (2) waive $2.5 million of base management fee that has been accrued but unpaid prior to but unpaid as of September 30, 2023. Any accrued base management fee waived under section (2) may be recouped by FCM within ten years.

Hi @BaluBalu
A potential report 'end date' will always be an open consideration.
As to TMF and EDV; well, we're seldom sure of what the 'pro' traders are attempting to do, eh? We've had about 2% of our portfolio in TMF for a few years, awaiting yield changes that would promote a decent price gain. TMF has travelled a rough chart during this period; as does its alter ego of TBT (the short position). These have always been 'hot potatoes'; but while we await pricing gains, we do have a tiny offset of a 3.33% yield. Generally, we do not enter an investment with only a 2% position, as this is not meaningful to any real support for an overall portfolio; but we took a fling and will patiently wait.
The recent good economic news and ongoing rising inflation potentials, as well as the looming election results are likely placing more pressure on the long duration bonds. Only my 'best guess'.

I'm totally ignorant about what you are trying to do with these moves. What do you aim for that couldn't be hit with some other type of investment?

Hi @BaluBalu
A potential report 'end date' will always be an open consideration.
As to TMF and EDV; well, we're seldom sure of what the 'pro' traders are attempting to do, eh? We've had about 2% of our portfolio in TMF for a few years, awaiting yield changes that would promote a decent price gain. TMF has travelled a rough chart during this period; as does its alter ego of TBT (the short position). These have always been 'hot potatoes'; but while we await pricing gains, we do have a tiny offset of a 3.33% yield. Generally, we do not enter an investment with only a 2% position, as this is not meaningful to any real support for an overall portfolio; but we took a fling and will patiently wait.
The recent good economic news and ongoing rising inflation potentials, as well as the looming election results are likely placing more pressure on the long duration bonds. Only my 'best guess'.

Yes, I think so also. But then, I'm not sure that it could get much worse. Actually, for a long-term capital gains situation buying/holding BA right now could be a real good move if you can hold on long enough. I'm too old for such things.
:(

They recently announced 10% layoffs across the board. So, there should be enough productivity gains.
Or they may simply be producing 10% fewer planes.

As a shareholder, I am fine with the wage increases. Co initial offer was 30%. They recently announced 10% layoffs across the board. So, there should be enough productivity gains. I am happy they will be back to work soon.
I just need the execs to get back to fixing the culture.
Side bar, There is a possibility, it is going to be M Bowman and not Powell’s world. In any case, Powell term ends in a year or so.

There is always makers and takers in personal life and at society level. Many of those guys / States making noise about the huge deficits, immigrants, etc. are not necessarily worried about the future of the country (they already think they are a different country) but worried about their freebies decreasing / stopping - it is about keeping their gravy train secure.
It is easier to work / help with / cure capabilities but you can not cure a sense of entitlement.
For the fiscal year ended Sept 30, federal Govt ran a deficit of $1.98T ($900B of which was net interest expense). The deficit was the third largest after 2020 and 2021.
We need to get the deficits (in excess of inflation) under control.

2011 was a long time ago.
Post-GFC, gold rallied hard and both gold and gold-miners peaked in 2011. Yep, people who bought then are still looking to get even.
Then both were trashed.
For years, it looked as if 2,000-2,100 was a ceiling for gold, but it broke out of that in March 2024. Factors contributing to the gold rally include Middle East tensions, Russia-Ukraine war, global moves away from dollar due to aggressive US dollar-diplomacy, central bank gold purchases, rapidly rising US debt, etc.
But as gold has rallied to new highs, gold-miners are still priced as if gold was around 2,000 - check 2010-11, 2020 and 2022.
So, either gold-bullion is overvalued now, or gold-miners are undervalued. I am betting on the latter. Watch $XAU around 164 bow; its 2010-11 peak was 225+.

Several years ago, in a discussion of those two types of bond div accounting, Yogi coined "accrual" vs. "NAV flow" as handles for them, which has always seemed pretty transparent language to me.

If we want to get accounting geeky, both are accruals: one to your account and the other to the NAV. The primary difference is where it is reflected.
The secondary difference perhaps is if you sold (before ex-date) a fund whose NAV is pregnant with accrued dividend, you are treating the accrued dividend as capital in nature whereas if you sold the same fund on ex-div date then the accrued dividend will be paid to you (with an equivalent drop in NAV) and is ordinary income in nature (barring limited exceptions). The reverse also applies when you are buying into the fund. If you buy a fund whose NAV is pregnant with dividend, then you are paying to get some of it back as a dividend (ordinary income). These differences are magnified if the dividend is paid quarterly or annually, rather than monthly. You will also notice the difference if your holding in the fund is in seven figures or more. This time of transaction distinction does not apply to funds that accrue div to your account and not to the NAV. This tax chatter may be useful only if you hold the fund in a taxable account. However, it may not be wise to delay your sale for tax reasons.
The third and minor difference is if you are transferring a fund from one brokerage to the other, more likely the fund that accrues div to the NAV transfers cleanly. But this is not a good reason to choose which fund one should invest in.
The above is not an exhaustive listing or discussion.
@Mona, please see this post as well.

d
@ducrow - You are correct that HBLIX is a bit more conservative than LOGIX. It holds considerably more fixed income / bonds and a lesser amount of equities. Both look like decent funds. “Year-over-year” LOGIX is up 21.74% (M*) while HBLIX is up “only” 18.91%. Both have been hot. So how much real risk reduction? Your plan might resemble leaping from the red hot frying pan into the bubbling stew pot. A bit cooler …..
Sounds like the contemplated switch is based in part on the premise that interest rates will continue falling. Maybe they will … Personally, I’m not too sure about that. It’s not the Fed or politicians that will ultimately determine longer term interest rates (a popular misconception). It’s things like government debt-load, inflation, economic growth / recessions, geo-politics (including wars), the dollar on the foreign exchanges and “black swans” like the recent global pandemic. A 10-year bond at just over 4% seems very low to those of us here who came of age in the 70s when mortgages were running 15+%.
I don’t think you can go wrong adding to cash after a couple very hot years. I also like a toe-hold in the precious metals - however they’ve been bid up a lot lately and could suffer a big correction. There’s not much out there that looks cheap to me right now in either fixed income or equities. Use a portfolio analyzer as one gage of where you are on the risk spectrum.
I note you own DODBX. Excellent fund. I owned it for many years before finally selling a year or so ago as part of a “consolidation” of assets under one umbrella.
Re Mike’s remark. if you type a fund’s symbol in capital letters the board’s software automatically highlights it and creates a link to a variety of sources. Good idea. I hadn’t paid much attention to that since I dwell mainly at the M* site and don’t mind entering symbols manually.
Good luck.

@ hank. I'm wearing big-boy pants today.

Yep. Thanks @WABC / There was someone here a month or so back who intended to do some stock or index shorting. Admire that kind of bravery.

That was me. And I got my face ripped off as a result, but the total outlay was only $250 which helps offset my end-of-year gains elsewhere.

Ended up holding on to CBLDX, it was actually up last Friday. It had positive returns in 2020 and 2022. That's the kind of bond fund I like. The five year returns are also pretty good, though I doubt we'll be in that sort of rate environment any time soon.
Sold TBUX, USTB, XONE, and WSHNX. It was too many funds anyway. I will likely consolidate into USFR and VRIG or PULS. Yes, they are boring, but I'm holding onto MNHAX, CBLDX, THOPX, and WCPNX, so there is still some excitement in bond land. Eventually I'll have to consolidate those holdings, but I don't think this is the best time. If the rate environment continues to deteriorate I won't hesitate to lock in profits.

Today I took a little less than half the proceeds from the sales above and put it into USFR. I divided the other half between VRIG and PULS. I'm watching MNHAX, CBLDX, THOPX and WCPNX like a hawk, and my finger is on the trigger. I can think of too many reasons for bonds to remain volatile into the new year.

Thanks @hank for doing the legwork and posting this. From what I gather from rapidly reading from the links provided, most of those who participate on this board may not qualify for the new ETFs. The strategy appears aimed at people who have north of $500,000 invested in a limited number of highly appreciated stocks and who could « seed » a new ETF for the purpose of avoiding CG taxes. This does not appear to be a DYI mechanism, nor does it pass my whiff test.

It sounds like something that cobbles together lots of different tax and investing rules to make it seem new, legitimate, and "democratizing". I agree that one should tread very carefully here.
Start with the second line in the prospectus's description of principal investment strategies:

Utilizing its own quantitative model, the Fund’s investment sub-adviser, Cambria Investment Management, L.P. (“Cambria” or the “Sub-Adviser”) selects value stocks with lower dividend distributions, which are generally taxed as ordinary income.

Say what?? My dividends are taxed as cap gains, how about yours?
The Bloomberg/Yahoo piece quotes Faber as saying that you exchange cap gain bearing securities for shares of the ETF in a tax free exchange. Bloomberg then goes on to say that this works like an "exchange fund" aka "swap fund" by way of explaining how your security exchange can be made tax free.
Here's a good primer on "exchange funds".
https://usecache.com/companion/what-is-an-exchange-fund
In short, a bunch of investors pool their appreciated assets into a partnership (the exchange fund). Since that's done as a tax-free swap, each investor retains their original cost basis and gets a pro-rata share of the partnership. Voila, instant diversification.
There are lots of government restrictions on exchange funds, including a seven year holding period and being limited to accredited investors. The $500K min does not appear to be a legal requirement, just a pragmatic one. The entity running the show doesn't want to deal with a lot of small potatoes in constructing the portfolio. It looks like that portfolio remains static (not sure about that).
Where the magic comes in (I think): once seeded, the partnership is converted into an ETF. This is the part that to me looks suspicious. It has the effect of removing the holding requirement on fund seeders and possibly some restrictions on the exchange fund portfolio composition.
I don't see how this "seeding" process (swapping securities for ETF shares) can continue once the ETF is up and running. The prospectus describes a conventional ETF where only Authorized Participants can buy and sell shares via creation units. To the rest of the world, this should look like any other ETF, including being open to all comers on the open market.
From that perspective, I would evaluate it like any other fund that hasn't launched yet.

Cambria founder / CEO Meb Faber was interviewed on Bloomberg today. The proposed fund is under review by the SEC. Faber anticipates a December launch date. It would be the first of 3 similar etfs, each focused on different types of investments. It is unclear how he intends to provide such focus. I thought the topic might be of interest to some here whether as consideration as a future investment / investment strategy or simply a discussion of existing tax codes, tax efficient investing and the tax advantages of etfs in general.
This is not a recommendation. Nor can I vouch for the accuracy or impartiality of any sources linked. There are some very tax-aware folks on the board, so would enjoy hearing their take. Corrections / amplifications welcome.
”Tax-Busting Tactic Loved by Tech Millionaires Is Coming to ETFs”
Bloomberg / Yahoo
”Cambria Partners with ETF Architect to Launch Innovative Tax-Aware ETF”
Street Insider
”An ETF Strategy for Deferring Embedded Gains”
ETF/.com
”How ETFs can make capital gains more tax efficient” (general discussion)
Invesco

@staycalm, Appreciate your optimism.
What is the redline if crossed is a no go for you? My redline - if the fund does not turn around by December and I am still holding it in January, call me out.
I point us back to @Racqueteer suggestion that for each investment, each of us must have a set expectation at the outset and that one needs to execute whatever that plan is so there is no slippery slope mission creep. Given I do not have unlimited capital, each investment has to perform in line with or exceed alternative opportunity set. My alternate opportunity set is PRWCX (quite low expectation given MRFOX is not an allocation fund).