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Scant 2013 Cap Gains Expected for PowerShares ETFs


Invesco’s (IVZ) PowerShares unit, the fourth-largest U.S. ETF issuer, said that it expects to deliver zero long-term capital gains distributions across 108 of 115 equity and fixed-income ETFs for 2013.

The announcement was made by Illinois-based PowerShares in a statement issued after the close of U.S. markets Thursday.

Most ETFs do not distribute capital gains to investors, which contributes the superior tax efficiency of the asset class over mutual funds. When mutual fund managers close a profitable trade, the tax liability is absorbed by investors, not the fund sponsor.

The seven PowerShares ETFs expected to make capital gains distributions this year represent less than 1% of total franchise assets. All seven of these Funds are expected to see long-term capital gains distributions under 1% of NAV per share, according to the statement. PowerShares had $87 billion in ETF assets at the end of the third quarter.

“At Invesco PowerShares we are proud of our product line’s tax efficient track record,” said Dan Draper, Invesco PowerShares managing director of global ETFs, in the statement. “Once again this year, we are pleased to report that the vast majority of PowerShares ETFs did not have long-term capital gains distributions.”

The ex-date for the distributions is expected to be Dec. 24. Here is a table with the affected PowerShares ETFs.

ETF Trends editorial team contributed to this post.


The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.