No. of Recommendations: 3
if I were interested say in those first six funds you listed, would a taxable account be a good or bad place for them? I’m not yet quite certain how taxes work wrt to these types of funds…Each has its own tax mix of distributions. You would need to look at each one for its details.
For example, google "abrdn total dynamic dividend fund (aod) tax treatment" which shows "a mix of net investment income, short-term capital gains, long-term capital gains, and/or a return of capital (ROC). The specific tax treatment for an individual investor's distributions is detailed on the Form 1099-DIV"
and "seeks to have more than 50% of its current dividend income qualify for the lower U.S. federal income tax rates applicable to "qualified dividend income".
From
https://www.aberdeeninvestments.com/docs?documentI...AOD expects distributions broken down as 11% STCG and 0% LTCG and 81% ROC.
ROC is not always bad, it isn't bad as long as the NAV is going up. There are ways that CEFs & ETFs can arrange things so that some of what they pay can legally be treated as ROC. ROC, of course, is not taxed.
Eaton Vance is very good at that in many of their funds. Ex: ETV "seeks to minimize and defer federal income taxes incurred by shareholders in connection with their investment in the Fund."
"The Fund has adopted a policy to pay common shareholders a stable monthly distribution, and may pay distributions consisting of amounts characterized for federal income tax purposes as qualified and non-qualified ordinary dividends, capital gains distributions and non-dividend distributions, also known as return of capital."
These are great in a taxable account, as you get the distributions virtually tax-free.
