I wrote an in-depth article on the tax efficiency of Exchange-Traded Funds (ETFs) in the U.S., explaining how their unique creation and redemption process minimizes capital gains taxes for shareholders. I explored key benefits like heartbeat trades, which allow ETF providers and authorized participants to further optimize taxes, and detailed the impact of recent regulatory updates (SEC Rule 6c-11) that enhance ETF flexibility and transparency. My work highlights how these tax advantages and structural efficiencies make ETFs a popular choice for both retail and institutional investors.
