FMD Capital Management

Posts Tagged: tax efficient

A Guide To Finding the Right Mid-Cap ETF

Written by David Fabian, September 05th, 2017

Most ETF portfolios I look through are heavily weighted towards large-cap stocks as the fundamental building blocks of an equity allocation.  Those who might have a higher risk tolerance or seek greater diversification qualities may also own some small cap exposure as a component of their investment strategy as well.  Because of this barbell type positioning, the most easily overlooked area is the middle ground known as mid-cap stocks.

Investopedia defines mid-cap stocks as those companies with market capitalizations between $2-$10 billion.  While those are fair guidelines, in practice there are many indexes that stretch the bounds of their capitalization requirements to even wider ranges.  Much of this is likely due to the extreme range of the large-cap group, which stretch from a lower bound of $10+ billion all the way to upwards of $800 billion at present market conditions.

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My New Favorite MLP ETF

Written by David Fabian, May 10th, 2017

Income investors have always had an affinity for master limited partnerships, or MLPs.  These unique vehicles offer exposure to the energy sector through a high yield, equity-like security.  Their business models and tax structures are such that they can pass through a great deal of their profits to shareholders in the form of dividends.  This makes them coveted for both their unconventional returns vs stocks or bonds in addition to their healthy income streams. Read more

3 CEFs for Tax-Efficient Total Return

Written by David Fabian, February 10th, 2017

Income investors with large taxable accounts are consistently focused on maximizing their total return and minimizing the impact of taxes on their nest egg.  That means seeking out funds that are sensitive to the type of income they produce and the implications of using capital losses to offset gains.

Exchange-traded funds (ETFs) are one avenue for investors to consider in this pursuit.  Many ETFs that track a passive index have low portfolio turnover rates and often pay little to zero capital gains at year-end.  These make for a truly inexpensive and effective vehicle for tax-conscious investors that want diversified stock or bond exposure. Read more

Municipal Bond ETFs Ignore Rising Rate Concerns

Written by David Fabian, December 15th, 2015

The investment community is holding its breath this week as the Federal Reserve meets to decide the fate of interest rates. Expectations are now centered on a small quarter point increase in the federal funds rate, which has the potential to jolt both the stock and bond markets. Many sectors tied to interest rate or credit sensitivity have seen a recent uptick in volatility in anticipation of this event.

In spite of those concerns, one arena that has continued on a steady upward trend has been municipal bond funds. These tax-conscious vehicles have been rock solid during a relatively choppy interest rate environment and now stand as the top fixed-income sector in 2015.

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The Subtle Switch From Investment Advisor To Tax Advisor

Written by David Fabian, November 18th, 2015

It’s begun. This week I have found my email inbox inundated by tax strategies designed to convey a sense of tremendous savings or value for readers. This was a real subject line that left me shaking my head: Generate tax alpha for your clients.

Really? Who comes up with this stuff? Read more