Hoping someone can help me understand this...
Accidentally came across an article in Fortune magazine
which states that:
"A major advantage of buying an ETF over an individual bond: If you're holding
the ETF in a regular taxable brokerage account, any inflation adjustments will
get distributed to you as income. That way you'll at least have the cash on hand
to pay the bill when the IRS comes knocking each year."
How does the ETF manage to pay you cash for the inflation adjustments? Or did
the author make an error in that the ETF will report it as a distribution, but
not really send you any money (because it gets reflected in the price per share)?
- posted 7 years ago