portlofio

chandniwadhwani92
Finance Junkie
Posts: 166
Joined: Mon Oct 06, 2014 7:36 am

portlofio

Postby chandniwadhwani92 » Tue Oct 28, 2014 9:23 am

Reason for less capital gains liability in ETFS as compared to open ended funds????

edupristine
Finance Junkie
Posts: 722
Joined: Wed Apr 09, 2014 6:28 am

portlofio

Postby edupristine » Wed Oct 29, 2014 9:16 am

ETF's generally generate relatively low capital gains because they typically have low turnover of their portfolio securities.

ETF dosen't need to constantly buy and sell stocks as ETF's are not redeemed by shareholders and hence less capital gains liability.

In open ended funds, shares can be bought and sold. On each share sold, capital gains tax has to be paid by shareholders which increases capital gains liabilty.

chandniwadhwani92
Finance Junkie
Posts: 166
Joined: Mon Oct 06, 2014 7:36 am

portlofio

Postby chandniwadhwani92 » Wed Oct 29, 2014 12:25 pm

etfs are not redeem by shareholders????/
Does open ended and close ended redeemed

edupristine
Finance Junkie
Posts: 722
Joined: Wed Apr 09, 2014 6:28 am

Postby edupristine » Fri Oct 31, 2014 9:36 am

Yes, ETF's and close ended funds are not redeemed by shareholders.

However, open ended funds can be redeemed by the investors.


Return to “CFA Level I”



cron

Disclaimer

Global Association of Risk Professionals, Inc. (GARP®) does not endorse, promote, review or warrant the accuracy of the products or services offered by EduPristine for FRM® related information, nor does it endorse any pass rates claimed by the provider. Further, GARP® is not responsible for any fees or costs paid by the user to EduPristine nor is GARP® responsible for any fees or costs of any person or entity providing any services to EduPristine Study Program. FRM®, GARP® and Global Association of Risk Professionals®, are trademarks owned by the Global Association of Risk Professionals, Inc

CFA Institute does not endorse, promote, or warrant the accuracy or quality of the products or services offered by EduPristine. CFA Institute, CFA®, Claritas® and Chartered Financial Analyst® are trademarks owned by CFA Institute.

Utmost care has been taken to ensure that there is no copyright violation or infringement in any of our content. Still, in case you feel that there is any copyright violation of any kind please send a mail to abuse@edupristine.com and we will rectify it.