How Are Your Mutual Fund and ETF Holdings Taxed?
Mutual funds and exchange-traded funds (ETF) offer many attractive benefits, including instant access to a collection of individual stocks that are managed by experts. They can be the ideal investment options if choosing your own stocks or losing all your money from one stock gives you nightmares.
But before you declare mutual funds and exchange-traded funds as superior investments over all other assets, it's important to understand how they really work. There are some key differences to point out: in particular, how much you'll have to pay in taxes. The investments you choose will determine how often you are taxed, how much you pay in taxes, and the strategies you can use to "negotiate" your tax bill.
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Source Fool.com
