|Investors Underestimate the Impact of ETF Capital Gains|
55% of Investors Surveyed Misunderstood Potential Tax Implications of ETFs
BlackRock Announces Estimated Year-End Capital Gains Distributions: Zero Capital Gains Distributions Expected for 98% of iShares ETFs
“While ETFs can be highly tax-efficient investment products, many
investors are surprised to find out that it’s possible to owe taxes on
capital gains distributions made by ETFs even if they didn’t sell the
security at a gain that year,” said
Capital gains in mutual funds and ETFs occur for the same reason they
occur in individual portfolios—the fund has sold securities at a profit
or generated income on holdings at some point during the year. Funds are
required to distribute those gains, which are subject to taxes by the
federal government, to shareholders by
Key questions to ask your financial advisor about the ETFs in your portfolio:
Dunne continued, “In a year when many ETF providers are paying out capital gains, including a significant number of bond ETFs, iShares has once again delivered professional quality products with a high level of tax efficiency which ultimately benefits our investors.”
Only five of 280 iShares ETFs are scheduled to pay capital gains distributions this year:
This information represents an estimate of the distribution per share as
of 11/09/12. The ex-date for the funds, or the date when the capital
gains distribution is deducted from the funds’ assets and set aside for
payment to shareholders, is
iShares is a global product leader in exchange traded funds with over 600 funds globally across equities, fixed income and commodities, which trade on 20 exchanges worldwide. The iShares Funds are bought and sold like common stocks on securities exchanges. The iShares Funds are attractive to many individual and institutional investors and financial intermediaries because of their relative low cost, tax efficiency and trading flexibility. Investors can purchase and sell shares through any brokerage firm, financial advisor, or online broker, and hold the funds in any type of brokerage account. The iShares customer base consists of the institutional segment of pension plans and fund managers, as well as the retail segment of financial advisors and high net worth individuals.
Carefully consider the iShares Funds’ investment objectives, risk factors, and charges and expenses before investing. This and other information can be found in the Funds’ prospectuses, which may be obtained by calling 1-800-iShares (1-800-474-2737) or by visiting www.iShares.com. Read the prospectus carefully before investing.
Investing involves risk, including possible loss of principal. Transactions in shares of the iShares Funds will result in brokerage commissions and will generate tax consequences. iShares Funds are obliged to distribute portfolio gains to shareholders. Shares of the iShares Funds may be sold throughout the day on the exchange through any brokerage account. However, shares may only be redeemed directly from a Fund by Authorized Participants, in very large creation/redemption units.
The iShares Funds are distributed by
An investment in the fund(s) is not insured or guaranteed by the
All registered investment companies, including iShares Funds, are obliged to distribute portfolio gains to shareholders at year’s end regardless of performance. Transactions in shares of the iShares Funds will also generate tax consequences and transaction expenses. The information provided is not intended to be tax advice. Tax consequences of dividend distributions may vary by individual taxpayer.
To receive a distribution, you must be a registered shareholder of the fund on the record date. Distributions are paid to shareholders on the payment date. Past distributions are not indicative of future distributions. Please consult your tax professional or financial advisor for more information regarding your tax situation.
The iShares Funds are not sponsored, endorsed or issued
1 Survey of 845 end investors who own/share financial
investment decision-making in his/her household was conducted during