Quote:
Originally Posted by Babubhat
Unless your are already stuck in mutual funds it’s only ETFs. More tax efficient. Can buy dividend aristocrats if looking for yield
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I don't understand why you would say that ETFs are more tax efficient than mutual funds. My stock investments are in the Vanguard S&P 500 Index mutual fund. Very tax efficient. It seems to me that the S&P 500 Index ETF would be less tax efficient. The ETF would attract investors who would buy and sell more often requiring the ETF manager to sell the stocks more frequently generating a lot more taxable events than in a mutual fund, and thereby creating more capital gain distributions. Mutual fund investors are more of the buy and hold type of investor. Isn't that correct?