DBEF

Complete Guide To 2012 Cap Gain Payouts

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(The following story and the accompanying table will be updated to reflect new data calculations, and fresh information from a number of fund sponsors, notably ETF Securities and Exchange Traded Concepts.)

Only 112 of the 1,442 ETFs trading in the United States are paying capital gains distributions this year, according to a comprehensive survey of ETF providers conducted by IndexUniverse. The numbers include 208 exchange-traded notes, which are included within the broader ETF universe under the IndexUniverse ETF Classification System.

The low payout ratio-just 7.7 percent of the broader universe-is a clear reaffirmation of the tax efficiency of ETFs, and is just 2 basis points more than the 7.5 percent rate recorded in our survey last year, the 'Complete Guide to 2011 ETF Cap Gain Payouts.'

The record for ETFs wasn't perfect, however, and varied by asset category, with equity funds coming in with relatively few capital gains distributions, while bond fund managers had considerably less success dodging the tax man as they struggled against the bullish flavor in bond markets in the anxiety-ridden aftermath of the 2008 market meltdown.

The most impressive performance came in traditional equity ETFs, where just 33 of 936 equity ETFs, or 3.6 percent of U.S.-listed equity funds, paid distributions. These payouts, however, included funds with some of the bigger distributions of any index equity ETF this year:the 10.95 percent by the Market Vectors Biotech ETF (NYSEArca:BBH).

Another similarly large distribution comes from Deutsche Bank's db-X MSCI EAFE Currency Hedged Equity Fund (NYSEArca:DBEF). It totaled more than 10 percent of the fund's net asset value at the end of 2012.

Active funds seemed to distribute capital gains a bit more frequently than index strategies, as payouts from both AdvisorShares and Columbia Funds suggest. That's not a huge surprise since portfolio turnover on active funds is usually much greater than on index funds.

Fixed Income Takes It On The Chin

Fixed income fared far worse than equities. Seventy-nine of 224 such ETFs paid out distributions, or about 35 percent of all nonleveraged ETFs. The payouts were small-68 of 79 paid out gains totaling less than 1 percent of each of the fund's net asset value.

Nonetheless, the number of payouts was rather high.

That pattern essentially reflects the post-crisis environment that has featured investors piling into fixed income in flight-to-safety, one-way traffic that has limited many managers' ability to offset cap gains through sales of readily available low-cost-basis securities at the portfolio level.

The challenge is rendered more difficult because bonds-unlike stocks-mature, forcing fund managers to realize gains at that time. Moreover, bond ETF creations and redemptions can occur in cash, which is less tax advantageous than the in-kind transactions that prevail in the world of equities.

Of the top three ETF sponsors, Vanguard and State Street Global Advisors had a fairly large number of bond funds with capital gains distributions, though iShares, the world's biggest ETF provider, had relatively few.

Additionally, Pimco, the world's biggest bond fund manager, declared cap gains distributions on 14 of its 19 ETFs.

All The Rest

Leveraged and inverse ETFs-unlike in 2011, when a plethora of funds were saddled with capital gains distributions-saw very few cap gains payouts in 2012. Just one fund from Direxion had a payout, and none from ProShares did. That's impressive, considering a total of 185 leveraged and inverse ETFs are listed in the United States.

Currency ETFs almost completely evaded the tax man this year, with just one of the 34 U.S.-listed currency ETF reporting capital gains payouts this year in our survey so far.

Alternative ETFs-an asset category that includes hedge fund replication, long/short ETFs and similar strategies-had five of 70 ETFs paying distributions in our preliminary tally. That's just 7 percent of those funds.

Why So Tax Efficient?

ETFs are known for being tax efficient for two primary reasons.

First, the vast majority of ETFs are index funds, which have low turnover and therefore tend to be more tax efficient than mutual funds. Second, the in-kind creation and redemption mechanism at the center of every ETF allows most ETFs to continually cleanse their portfolios of positions with embedded capital gains.

ETNs are uniquely advantaged when it comes to capital gains, as due to their note structure, they don't make capital gains distributions. ETNs make up approximately 14 percent of all U.S.-listed exchange-traded products, across all asset classes.

Excluding ETNs, there were 112 payouts from 1,234 true exchange-traded funds, or just over 9 percent of all bona fide ETFs.

Invesco PowerShares171Total ETFsNameTicker

Short Term Distribution ($/share)

Estimated Percentage of NAV

Long Term Distribution ($/share)

Estimated Percentage of NAV

Total Distribution ($/share)

Total Distribution (%)

NAV as of 12/27/2012

PowerShares S&P 500 Buy Write

PBP

-

0.00%

0.1454

0.74%

0.1454

0.74%

19.5776

PowerShares 1-30 Laddered Treasury Portfolio

PLW

0.00%

0.0010

0.00%

0.0010

0.00%

32.8853

PowerShares Active Low Duration Fund

PLK

0.00%

0.0634

0.25%

0.0634

0.25%

25.3674

iShares280 Total ETFsNameTicker

Short Term Distribution ($/share)

Estimated Percentage of NAV

Long Term Distribution ($/share)

Estimated Percentage of NAV

Total Distribution ($/share)

Total Distribution (%)

NAV as of 12/27/2012

iShares Barclays Aggregate Bond Fund

AGG

0.4000

0.36%

0.0400

0.04%

0.4400

0.40%

111.16

iShares Barclays GNMA Bond Fund

GNMA

0.2200

0.44%

0.00%

0.2200

0.44%

49.9

iShares iBoxx $ Investment Grade Corporate Bond Fund

LQD

0.00%

0.0100

0.01%

0.0100

0.01%

121.19

iShares Barclays MBS Bond Fund

MBB

0.2300

0.21%

0.00%

0.2300

0.21%

108.06

iShares Financials Sector Bond Fund

MONY

0.2600

0.49%

0.00%

0.2600

0.49%

52.8

Jefferies2 Total ETFsNameTicker

Short Term Distribution ($/share)

Estimated Percentage of NAV

Long Term Distribution ($/share)

Estimated Percentage of NAV

Total Distribution ($/share)

Total Distribution (%)

NAV as of 12/27/2012

No capital gains distributions in 2012.

Pax World2 Total ETFsNameTicker

Short Term Distribution ($/share)

Estimated Percentage of NAV

Long Term Distribution ($/share)

Estimated Percentage of NAV

Total Distribution ($/share)

Total Distribution (%)

NAV as of 12/27/2012

No 2012 capital gains distributions.

Pimco17 Total ETFsNameTicker

Short Term Distribution ($/share)

Estimated Percentage of NAV

Long Term Distribution ($/share)

Estimated Percentage of NAV

Total Distribution ($/share)

Total Distribution (%)

NAV as of 12/27/2012

Pimco 1-3 Year Treasury Fund

TUZ

0.0000

0.00%

0.1438

0.28%

0.1438

0.28%

50.8781

Pimco 1-5 Year U.S. TIPS Index Fund

STPZ

0.0025

0.00%

0.0285

0.05%

0.0310

0.06%

54.0587

Pimco Broad U.S. TIPS Index Fund

TIPZ

0.0000

0.00%

0.0043

0.01%

0.0043

0.01%

61.4969

Pimco 7-15 Year U.S. Treasury Index Fund

TENZ

0.0542

0.06%

0.4948

0.57%

0.5490

0.63%

87.0384

Pimco 3-7 Year U.S. Treasury Index Fund

FIVZ

0.0642

0.08%

0.5554

0.68%

0.6197

0.76%

81.3582

Pimco Total Return Fund

BOND

0.8826

0.81%

0.0000

0.00%

0.8826

0.81%

108.9998

Pimco Intermediate Municipal Bond Strategy Fund

MUNI

0.0574

0.11%

0.0127

0.02%

0.0701

0.13%

54.2718

Pimco Short Term Municipal Bond Strategy Fund

SMMU

0.0000

0.00%

0.0044

0.01%

0.0044

0.01%

50.3649

Pimco Build America Bond Strategy Fund

BABZ

0.8501

1.53%

0.8532

1.54%

1.7033

3.07%

55.4794

Pimco Investment Grade Corporate Bond Index ETF

CORP

0.6021

0.56%

0.1512

0.14%

0.7533

0.70%

108.1828

Pimco Broad U.S. Treasury Index Fund

TRSY

2.8282

2.69%

0.0000

0.00%

2.8282

2.69%

105.1238

Pimco Australia Bond Index Fund

AUD

0.0777

0.07%

0.0000

0.00%

0.0777

0.07%

103.7533

Pimco Canada Bond Index Fund

CAD

0.3031

0.29%

0.0000

0.00%

0.3031

0.29%

105.3904

Pimco Global Advantage Inflation-Linked Bond Fund

ILB

0.1590

0.30%

0.0000

0.00%

0.1590

0.30%

53.5856

Precidian1 Total ETFNameTicker

Short Term Distribution ($/share)

Estimated Percentage of NAV

Long Term Distribution ($/share)

Estimated Percentage of NAV

Total Distribution ($/share)

Total Distribution (%)

NAV as of 12/27/2012

No capital gains distributions in 2012

ProShares139 Total ETFsNameTicker

Short Term Distribution ($/share)

Estimated Percentage of NAV

Long Term Distribution ($/share)

Estimated Percentage of NAV

Total Distribution ($/share)

Total Distribution (%)

NAV as of 12/27/2012

Company says none of its equity and fixed-income ETFs will pay any 2012 capital gain distributions.

RevenueShares6 Total ETFsNameTicker

Short Term Distribution ($/share)

Estimated Percentage of NAV

Long Term Distribution ($/share)

Estimated Percentage of NAV

Total Distribution ($/share)

Total Distribution (%)

NAV as of 12/27/2012

No capital gains distributions at this time.

Russell24 Total ETFsNameTicker

Short Term Distribution ($/share)

Estimated Percentage of NAV

Long Term Distribution ($/share)

Estimated Percentage of NAV

Total Distribution ($/share)

Total Distribution (%)

NAV as of 12/27/2012

No capital gains distributions in 2012.

Note:Company shut 25 index ETFs in August.

SSgA117 Total ETFsNameTicker

Short Term Distribution ($/share)

Estimated Percentage of NAV

Long Term Distribution ($/share)

Estimated Percentage of NAV

Total Distribution ($/share)

Total Distribution (%)

NAV as of 12/27/2012

SPDR Barclays Capital Aggregate Bond ETF

LAG

0.2350

0.40%

0.0830

0.14%

0.3180

0.54%

58.7026

SPDR Barclays Capital Convertible Securities ETF

CWB

0.1170

0.29%

0.3830

0.96%

0.5000

1.25%

39.9474

SPDR Barclays Capital Intermediate Term Corporate Bond ETF

ITR

0.0080

0.02%

0.0620

0.18%

0.0700

0.20%

34.6583

SPDR Barclays Capital Intermediate Term Treasury ETF

ITE

0.0000

0.00%

0.2860

0.47%

0.2860

0.47%

60.8336

SPDR Barclays Capital Mortgage Backed Bond ETF

MBG

0.4220

1.55%

0.0000

0.00%

0.4220

1.55%

27.2844

SPDR Barclays Capital Short Term Corporate Bond ETF

SCPB

0.0090

0.03%

0.0180

0.06%

0.0270

0.09%

30.6541

SPDR Nuveen Barclays Capital California Municipal Bond ETF

CXA

0.0440

0.18%

0.4840

1.99%

0.5280

2.17%

24.2792

SPDR Nuveen Barclays Capital Municipal Bond ETF

TFI

0.0040

0.02%

0.2730

1.13%

0.2770

1.14%

24.2211

SPDR Nuveen Barclays Capital Short Term Municipal Bond ETF

SHM

0.0010

0.00%

0.0450

0.19%

0.0460

0.19%

24.2648

SPDR Nuveen S&P High Yield Municipal Bond ETF

HYMB

0.0830

0.14%

0.0000

0.00%

0.0830

0.14%

58.2991

SPDR Barclays Capital Issuer Scored Corporate Bond ETF

CBND

0.0530

0.16%

0.0460

0.14%

0.0990

0.30%

32.6487

SPDR Barclays International Corporate Bond ETF

IBND

0.0040

0.01%

0.0310

0.09%

0.0350

0.10%

35.2046

SPDR Barclays Long Term Corporate Bond ETF

LWC

0.0460

0.11%

0.0800

0.19%

0.1260

0.30%

41.5977

SPDR Barclays Emerging Markets Local Bond ETF

EBND

0.0380

0.12%

0.0080

0.02%

0.0460

0.14%

32.0176

SPDR Nuveen Barclays New York Municipal Bond ETF

INY

0.0000

0.00%

0.1650

0.69%

0.1650

0.69%

24.0017

SPDR Dow Jones Mid Cap ETF

EMM

0.2380

0.36%

0.2440

0.37%

0.4820

0.73%

65.6071

SPDR S&P Software & Services ETF

XSW

1.1760

1.90%

0.0000

0.00%

1.1760

1.90%

61.9437

SPDR S&P Health Care Services ETF

XHS

2.7010

4.09%

0.0000

0.00%

2.7010

4.09%

66.0353

SPDR S&P Health Care Equipment ETF

XHE

0.6140

1.10%

0.2650

0.48%

0.8790

1.58%

55.7313

SPDR S&P Aerospace & Defense ETF

XAR

0.3410

0.54%

0.0000

0.00%

0.3410

0.54%

63.4464

SPDR S&P International Mid Cap ETF

MDD

0.0670

0.23%

0.0000

0.00%

0.0670

0.23%

28.5849

SPDR MSCI ACWI IMI ETF

ACIM

0.0160

0.03%

0.0000

0.00%

0.0160

0.03%

51.0533

SPDR S&P Small Cap Emerging Asia Pacific ETF

GMFS

3.2210

7.79%

0.0000

0.00%

3.2210

7.79%

41.3611

Teucrium6 Total ETFsNameTicker

Short Term Distribution ($/share)

Estimated Percentage of NAV

Long Term Distribution ($/share)

Estimated Percentage of NAV

Total Distribution ($/share)

Total Distribution (%)

NAV as of 12/27/2012

Capital gains. if any. are allocated and not distributed in futures-based commodities funds.

US Commodity Funds10 Total ETFsNameTicker

Short Term Distribution ($/share)

Estimated Percentage of NAV

Long Term Distribution ($/share)

Estimated Percentage of NAV

Total Distribution ($/share)

Total Distribution (%)

NAV as of 12/27/2012

Capital gains. if any. are allocated and not distributed in futures-based commodities funds.

Van Eck46 Total ETFsNameTicker

Short Term Distribution ($/share)

Estimated Percentage of NAV

Long Term Distribution ($/share)

Estimated Percentage of NAV

Total Distribution ($/share)

Total Distribution (%)

NAV as of 12/27/2012

Market Vectors Biotech ETF

BBH

0.1660

0.31%

5.6750

10.64%

5.8410

10.95%

53.323

Market Vectors Small-Cap Brazil ETF

BRF

0.0000

0.00%

0.0250

0.06%

0.0250

0.06%

41.7584

Market Vectors Oil Services ETF

OIH

0.0070

0.02%

0.0000

0.00%

0.0070

0.02%

38.2265

Market Vectors CEF Municipal Income ETF

XMPT

0.0065

0.0065

TBA

Market Vectors Intermediate Municipal Index ETF

ITM

0.0021

0.0021

TBA

Market Vectors Short Municipal Index ETF

SMB

0.0110

0.0110

TBA

Market Vectors Emerging Markets High Yield Bond ETF

HYEM

0.0080

0.0080

TBA

Market Vectors Fallen Angel High Yield Bond ETF

ANGL

0.1200

0.1200

TBA

Market Vectors LatAm Aggregate Bond ETF

BONO

0.0120

0.0120

TBA

Market Vectors Mortgage REIT ETF

MORT

0.0022

0.0022

TBA

Vanguard64 Total ETFsNameTicker

Short Term Distribution ($/share)

Estimated Percentage of NAV

Long Term Distribution ($/share)

Estimated Percentage of NAV

Total Distribution ($/share)

Total Distribution (%)

NAV as of 12/27/2012

Extended Duration Treasury ETF

EDV

1.3200

1.12%

2.9200

2.48%

4.2400

3.60%

117.71

Intermediate-Term Bond ETF

BIV

0.1200

0.14%

1.4200

1.61%

1.5400

1.75%

88.15

Intermediate-Term Corporate Bond ETF

VCIT

0.2800

0.32%

0.1700

0.19%

0.4500

0.51%

87.46

Intermediate-Term Government Bond ETF

VGIT

0.1800

0.27%

0.4300

0.66%

0.6100

0.93%

65.5

Long-Term Bond ETF

BLV

0.2300

0.24%

1.0900

1.16%

1.3200

1.40%

94.31

Vanguard Long-Term Corporate Bond ETF

VCLT

0.2000

0.22%

0.0300

0.03%

0.2300

0.25%

92.02

Vanguard Long-Term Government Bond ETF

VGLT

0.0200

0.03%

0.1200

0.16%

0.1400

0.18%

76.04

Mortgage-Backed Securities ETF

VMBS

0.2600

0.50%

0.0100

0.02%

0.2700

0.52%

52.19

Short-Term Bond ETF

BSV

0.0300

0.04%

0.1800

0.22%

0.2100

0.26%

80.91

Short-Term Corporate Bond ETF

VCSH

0.0400

0.05%

0.0900

0.11%

0.1300

0.16%

79.98

Short-Term Government Bond ETF

VGSH

0.0300

0.05%

0.0700

0.12%

0.1000

0.16%

60.85

Total Bond Market ETF

BND

0.1700

0.20%

0.2600

0.31%

0.4300

0.51%

83.98

WisdomTree47 Total ETFsNameTicker

Short Term Distribution ($/share)

Estimated Percentage of NAV

Long Term Distribution ($/share)

Estimated Percentage of NAV

Total Distribution ($/share)

Total Distribution (%)

NAV as of 12/27/2012

WisdomTree Euro Debt Fund

EU

0.1955

0.86%

0.1955

0.86%

22.6809

WisdomTree Emerging Markets Local Debt Fund

ELD

0.0948

0.18%

0.0561

0.11%

0.1508

0.28%

53.0339

WisdomTree Asia Local Debt Fund

ALD

0.2665

0.51%

0.0164

0.03%

0.2829

0.54%

52.3359

WisdomTree Dreyfus Chinese Yuan Fund

CYB

0.00%

0.1992

0.78%

0.1992

0.78%

25.5211

Note:Number of total funds for each sponsor according to IndexUniverse's ETF Classification System. Capital gains percentages have been calculated using traditional 'holding period' methodologies. Where possible, all cap gains paid in a calendar year are divided by the NAV at the start of that year. Where a fund did not begin trading until after the first of the year, the longest possible holding period is used.

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Copyright ® 2012 IndexUniverse LLC . All Rights Reserved.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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