Intelligence

Why ETF Investors Should Pay Attention to Tax Reform

Tax reform is on the way and investors are going to feel certain effects from that. The focus for this story is on how the tax bill may impact ETF investors. 1. Overall, what does the tax bill mean for investors? Does it have the potential to be good, bad or not make a difference? 2. Which ETF sectors may take a hit as a result of the tax reforms to come? For example, are housing ETFs in jeopardy because of the reduction to the mortgage interest deduction? Will health care ETFs struggle now that health insurance is no longer mandatory? How will bond ETFs be affected? Are there any other ETF sectors/categories that investors should be keeping a close eye on? 3. Which ETF sectors are most likely to benefit as a result of tax reform? For instance, would small-cap ETFs become a better buy because of the new tax cuts for corporations? Will tech ETFs be a winner or loser? What about dividend or financial ETFs? 4. How can investors evaluate whether they need to reallocate any of their ETF holdings going forward? 5. What should ETF investors not be doing as we move into 2018?