Or purchase ETFs taxed under general tax principles (CGT)Hard to avoid many articles buy the hay stack not the needle etc. Say deemed disposal 41% on ETF against capital gains say after 10-15 yrs time frame.
Has anyone looked at actual figures or can share example/experience on buying the haystack or sticking with individual shares diversified across many sectors in relation to above time frame.
There's arguably a third way - buy already diversified conglomerate shares that operate like index/ETF proxies. The links of Berkshire Hathaway or other holding companies that operate in a similar fashion. Diversification with CGT taxation in one.sticking with individual shares diversified across many sectors
There aren't any.Or purchase ETFs taxed under general tax principles (CGT)
Which requires the services of a highly-paid manager, thus defeating the primary attraction of ETFs…Or purchase ETFs taxed under general tax principles (CGT)
Isn't the situation - particularly with regard to (some) US, EEA, OECD domiciled ETFs - more nuanced than that? See here:There aren't any.
BRK does not operate like a proxy for an index fund - not even close.There's arguably a third way - buy already diversified conglomerate shares that operate like index/ETF proxies.
Not trueThere aren't any.
How does having an investment manager defeat the primary attraction of diversification relative to a single stock or concentrated stock portfolio?Which requires the services of a highly-paid manager, thus defeating the primary attraction of ETFs…
Yes, when you examine the prospectus many US ETFs qualify.Is there a specific example of one that is taxed under general tax principles, and why?
I was taking a simplified approach.That's too simplistic
Thanks folks replies to date. What I am doing at the moment is trying to clear in my own mind how to invest in equities spread over the next say two years. Averaging in.I'm not really clear what question(s) you're asking.
On the tax issue - over an 8 year investment timeframe for simplicity - the tax on growth of an ETF versus a basket of shares is 41% versus c. 33% - so the ETF is at an 8% "disadvantage".
So if you have a basket of shares that mirrors the composition of the ETF and both generate similar returns then you might expect to be 8% ahead with shares.
What other information are you looking for?
That’s too simplisticThat's too simplistic, the ETF is also benefitting from gross roll-up so it's not paying tax on dividends.
The basket of shares are paying up to 52% income tax on dividends each year so the difference would be less than 8%.
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