ETFs Again Proved Their Worth to Taxable Investors in 2020
Most avoided capital gains distributions this year.
Most avoided capital gains distributions this year.
Capital gains season is here, and exchange-traded fund investors once again have reason to celebrate. Most ETFs will not be making capital gains distributions in 2020.
To date, 12 of the largest ETF sponsors--which together manage 95% of the $5.2 trillion invested in ETFs--have reported estimated capital gains distributions for their funds. These 12 firms back a total of 1,392 ETFs, representing 61% of the 2,285 ETFs available to investors as of Dec. 10, 2020. Among these 1,392 ETFs, just 70 (5%) will distribute capital gains to their investors this year. The impact of these distributions on investors’ tax bills will generally be small, as 59 of the 70 (84%) of the funds spinning off gains will make distributions that amount to less than 1% of their Nov. 30 net asset values.
Ben Johnson does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.