I have a Wells Fargo Mutual Fund account but I want to move it into an ETF account. Is it possible to move it without incurring capital gains tax? Or is it cheaper to leave it and just start adding money from now on to the ETF? Or does it strictly depend upon the amount already invested in the Mutual Fund? Excuse my ignorance I am pretty new at this.
Changing broker/custodian won't incur tax if you can transfer your positions "in kind". Changing from mutual funds to ETF positions will require you to close the MF positions and open new ETFs... will incur tax as appropriate.
ETFs and MFs are different instruments with difference expense ratios, distribution schedules and many other factors. Firstly, tell us WHY you want to convert to ETF versus leaving it as MF?
Ditto. If a MF and ETF have the same investment objective, the only significant differences are that the MF will have "end of day only" fills, and be limited in their sell options. If that's not an issue for the investor's style, no significant benefit in replacing one with the other. (May be a small difference in long-term performance for B&H investors in that ETFs typically have slightly lower management fees. Fidelity is even doing a "zero management fee" S&P 500 ETF.... as a loss leader to attract biz?)
There is an advantage of putting your assets in a margin account though as you can trade other strategies on margin. Is the mutual fund in a margin account?
Depends on what type of mutual fund in your wells fargo account. If you have Vanguard mutual fund, then it can be converted to equivalent Vanguard ETF's. Vanguard mutual funds (most but not all) and ETF are interchangeable . I recall, Vanguard owns patent for this and is not possible for other mutual funds offered by other companies.
Why don't you call Wells Fargo and ask your financial advisor? You should have one assigned to you. If not, speak to them about it.
re: tax issues are you familiar with capital gains distributions issues with mutual funds? there are 1.1M citations on google on this subject.in general etfs are more tax efficient for individuals than mutual funds,