PT - JOURNAL ARTICLE AU - A. Seddik Meziani TI - Along Came a SPDR DP - 2001 Sep 21 TA - ETFs and Indexing PG - 144--154 VI - 2001 IP - 1 4099 - http://guides.pm-research.com/content/2001/1/144.short 4100 - http://guides.pm-research.com/content/2001/1/144.full AB - Exchange-traded funds (ETFs) are investment tools that can insulate investors from the negative effect of money flows that generate tax liabilities. This study demonstrates that ETFs clearly offer a tax advantage when compared to similar index-based mutual funds, but mostly for investors who favor a buy-and-hold investment strategy. Short-term holders will not benefit nearly as much from ETF tax-efficiency. This study also concludes that there exists an inverse relationship between tax-efficiency and marginal tax rates, with the least affluent investors enjoying most of the tax savings.