Investing Ideas

Tax management strategies with ETFs

Year-end tips for managing clients’ capital gains and avoiding distributions.

By: Craig Ebeling

Updated: 11/17/2025

Key Takeaways

Switching from mutual funds to exchange-traded funds (ETFs) can result in meaningful tax savings for some clients and boost their after-tax returns.
ETFs can help reduce clients’ tax liabilities via in-kind redemptions, secondary market trading, and refraining from forced sales—all of which can help clients stay invested while avoiding capital gains distributions.
Proactive tax strategies reinforce the advisor’s fiduciary role and can help deepen client relationships, support wealth preservation goals, and demonstrate tangible value.

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Tax management strategies with ETFs

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