ETFs and Tax Savings

Investors seeking to recognize losses on stocks or bonds may find exchange traded funds a handy portfolio substitute.

Jonathan Burton writes that ETFs are great portfolio placeholders because they are low cost, liquid and match almost any desired exposure.  Another benefit is that ETFs do not charge the short term holding penalty that is levied by many mutual funds.

Burton’s examples of stock and ETF substitute pairs include:

GE and the Vanguard Industrials ETF (VIS)

Merck and the Health Care Select Sector SPDR ETF (XLV) or Vanguard Health Care ETF (VHT)

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