Timeline for Shouldn't the rebalancing of an ETF result in profit/loss
Current License: CC BY-SA 4.0
4 events
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| Feb 14, 2019 at 2:00 | comment | added | nanoman | @BobBaerker Can you provide a cite that in-kind creation or redemption can avoid a capital gain when exchanging one security for another (altering the ETF's portfolio), as opposed to the standard case of exchanging shares of the ETF itself for the portfolio basket? The latter is the usual role of authorized participants; I haven't seen the former. | |
| Jan 15, 2019 at 1:10 | comment | added | Bob Baerker | There are fees involved because there are transactional costs and the AP doesn't work for free. But those are operational costs which aren't tax issues that you alluded to. I wouldn't say that this process is categorically true in all cases since leveraged and inverse ETFs are bit complex structurally and I surmise that they may not be cookie cutter simple like mimicking an index. But that's just a guess on my part. | |
| Jan 15, 2019 at 0:54 | comment | added | Darren rogers | So the AP goes and swaps the share A for equal dollar amount of Share B, thus avoiding selling Share A then buying Share B. And there are no associated fees with this? | |
| Jan 15, 2019 at 0:24 | history | answered | Bob Baerker | CC BY-SA 4.0 |