Hi, I'm trying to understand the consequences of holdings LETFs in a taxable account.
My understanding is that if you buy a 3x fund like UPRO, you're not facing daily STCG, is that right or is it obfuscated in the ER? My thought is that there's no intermittent tax, since all discussions on tax drag have been around rebalancing the LETFs with HFEA, not about just holding the position.
And what about with the following instruments:
NTSX - this holds a 90/60 fund with treasury futures and does rebalancing for you.
TYA - 2.25x leverage on treasury futures.
UPAR - holds futures on SPY, and treasuries.
It's been claimed that holding treasury futures is more tax efficient for getting treasury exposure in a taxable account. So in these cases, are there taxable events happening and being carried on to me? And if not, it seems holding something like TYA is better than rolling your own 2.25x treasury ladder given that i know rolling will have taxable events if you self-manage.
How are leveraged ETFs taxed? (UPRO, TYA, NTSX, UPAR etc)
- hiddenpower
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