July 6, 2006
ETFs Versus Futures
ETFs are an attractive alternative to futures because ETFs offer institutions many more choices in terms of style and industry exposure. According to a Smith Barney Equity Research study, ETFs are more efficient and cheaper for time periods of six months or more because quarterly roll costs do not apply. Also, all futures are taxed according to the 60/40 Rule. Regardless of how long the position is held, 60% of the gain is taxed as long-term while 40% is taxed as short-term. ETFs on the other hand are taxed identical to stocks, so the tax implications are entirely dependent on how long an investor holds the fund and the extent of any distributions.
Cat: | Time: 7:15 am (utc+8)