ProShares’ Positive Tax Surprise?
IndexUniverse Staff (November 17th, 2009) Writes:
ProShares’ newfound tax efficiency is surprising and welcome. Will the other leveraged funds follow suit?
In case you missed it, ProShares announced today that it will pay zero capital gains on its complete family of ETFs in 2009. That’s shocking, given the huge cap-gains payouts by inverse ETFs in 2008. I would have thought, given the huge run in the market this year, that leveraged funds would have accumulated large distributions.
In fact, I had a half-written blog warning investors to sell out of leveraged ETFs ahead of the 2009 distribution announcements. I was worried that investors would get stuck with large distributions yet again, and didn’t want to see that happen. It was lucky timing that the ProShares announcement jumped ahead of me publishing that blog.
The question now is, will other leveraged and inverse ETF providers like Rydex and Direxion Shares follow suit?
On one level, I think the answer
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It was bound to happen, I suppose. While exchange-traded funds have not yet attracted the multi-trillions of dollars that mutual funds have, ETFs have become popular enough they’re starting to acquire some of the bad habits of their older rivals.


