6 Proven, Revolutionary Tactics to Decimate Your Tax Bill with Bond ETFs
Tax efficiency is a critical yet often overlooked factor in long-term investment success, particularly for fixed-income portfolios. Bond ETFs, while providing predictable income, face significant erosion of returns due to taxation. Interest distributions are typically taxed at ordinary income rates, reaching up to 37% federally, creating a 'silent drain' on compounding growth.
Unlike equities, where gains can be deferred, bond ETF distributions trigger frequent tax events, diverting capital that could otherwise be reinvested. This makes strategic tax planning for fixed-income investments more urgent than for growth-oriented assets. Bond ETFs, however, offer inherent structural advantages that can mitigate these inefficiencies when Leveraged correctly.
