Which of the following funds are usually most tax efficient?

Question

Quizplus · Accepted Answer

ETFs are typically more tax efficient compared to other funds because they have fewer capital gains distributions due to their structure of redeeming "in-kind" rather than selling securities like mutual funds do. Bond funds may also be tax-efficient, but it depends on the type of bonds they hold and the investor's tax bracket. Equity funds and specialized sector funds tend to have higher capital gains distributions due to frequent buying and selling of securities.

Which of the Following Funds Are Usually Most Tax Efficient