S&P Dow Jones Indices and MSCI move real-estate investments into their own sector, therefore lose some tax advantages.
Editor’s Remarks: With the rising flow of cash into ETF’s come the changing regulations and conditions that they face. One of the principal benefits of ETF’s comes in the form of the tax advantages they present. They can avoid transactions which are taxed in that the securities are swapped without raising cash to do so. It is not quite clear how much the tax will be but the movement of the assets from the fund will generate a bill for investors. For the index firms, real estate will now be moved away from the financial sector. However, with more capital flowing into ETF’s, a few more changes should surely come along the way.
What to watch: S&P Dow Jones Indice, BlackRock, Vanguard