says the guy who doesn’t understand what the fund does before commenting and then says the fund will definitely crash.
Besides BOXX, are there any other low risk ETFs or strategies to capture short or long term capital gains instead of dividends?
"The Alpha Architect 1-3 Month Box ETF (BOXX) has become a popular investment. It promises the risk and returns of Tbills but with capital gains tax treatment rather than ordinary income. Is it too good to be true? Probably."
I don't think he gets it. With BOXX you can control when you get taxed. This could be huge if you're planning to retire and move from an income tax state to a no income tax state. Imagine if you know that 5 or 10 years from now your income will be half what it currently is. Imagine that you have a kid who's going to college and there are programs that will not be available if your income exceeds a certain threshold. Imagine that you 95 years old and your kids might avoid the tax entirely. I think there are some clever ways one could use this to their advantage and it would be interesting to hear a really savvy person explain them. This guy's seems to be looking at a static scenario where nothing ever changes.
I think it is important to pay close attention to the later part of the video that outlines why the tax treatment of BOXX as capital gains will not likely stand -- BOXX even outlines this in a lengthy section of the fund's disclosure document. This is the risk.
Boxx has been around since 2022, can he point to a single instance where this has happened? Risk disclosures in a prospectus list everything short of an alien invasion. Seems to me that if the IRS were going to have an issue with this it would have already happened in the past couple years. If this was their first year of operation I'd be more concerned.
The general belief among accountants, is that if the IRS doesn't come after you within 3 years, you are safe
When I used to work in compliance my boss would sometimes tell me that I shouldn't make a mountain out of a molehill. Still not sure if I helped them commit fraud, but that was years ago so who cares?
Push comes to shove, I tend to agree w/ the youtube video's conclusion... there seems to be extra reinvestment risk. Since, at this point in the cycle, even if the returns could be treated as cap gains, you might not want to hold on long enough should rates drop quickly. Just pay your taxes.