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[quote=Anonymous][quote=Anonymous]there is another big difference no one has mentioned. Tracking for gain/loss. Mutual funds usually have dividends and capital gains which are taxable when you receive them, but also need to be added to basis when you sell the mutual fund (since you now own more shares via the reinvested div/cg). Most investment firms don't actually track this for you. So if you keep mututal funds for a long period of time you need to track this which can be a pain. Which is why none of our taxable accounts are in mutual funds, only ETF's...[/quote] First, most firms will track average cost basis for you, and they are required to do so for any shares purchased since 1/1/2012. Second, nothing about an ETF changes this dynamic. You can get dividends in cash for either a MF or an ETF, in which case there is no change in cost basis. Some ETFs may let you reinvest dividends, but if they do you will have the same cost-basis tracking issue.[/quote]
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