Exchange Traded Funds (ETF) offer an easy-to-use, low cost, and tax efficient way to invest your money. We took to the streets of San Francisco and asked people, “What is an ETF?” Here’s what they had to say.
The savings in fees and taxes by investing with iShares Funds can really add up. Learn more.
1 Shares of iShares Funds may be bought and sold throughout the day on the exchange through any brokerage account. However, shares may only be created or redeemed directly from the Fund by Authorized Participants-- typically large institutional investors--in very large creation/redemption units. When comparing stocks or bonds and iShares Funds, it should be remembered that management fees associated with fund investments, like iShares Funds, are not borne by investors in individual stocks or bonds.
2 Morningstar, as 12/31/2014. Post-tax comparison made between the returns at NAV of iShares S&P domestic equity style box funds and all share classes of all active Open-End Mutual Funds within the Morningstar US style box category available in the US at the beginning of the investment period that survived through the end of the investment period. Returns are calculated after taxes on distributions, including capital gains and dividends, assuming the highest federal tax rate for each type of distribution in effect at the time of the distribution. Overall figure is a weighted average of the percentage of funds that the iShares ETF outperformed in each style box, weighted based on assets in each style box. Performance may be different for other time periods. US style box mutual funds are those active funds categorized by Morningstar as US Large Cap Growth / Blend / Value, US Mid Cap Growth / Blend / Value or US Small Cap Growth / Blend / Value. Past performance is no guarantee of future results.
Click here for standardized returns.
For more information on the differences between iShares ETFs and mutual funds, click here.
3 "Tax cost" is a Morningstar measure of the impact of taxes on capital gains and income distributions on performance. The average tax cost of the iShares ETFs and active Open-End Mutual Funds included in the comparison = 0.53% and 1.05%, respectively.
iShares ETFs cost about 1/3 as much as the typical mutual fund and have 1/2 of the average tax cost when compared to similar mutual funds.3