The Investment Company Institute has asked the US Treasury Department for guidance on a fast-growing ETF strategy that allows investors to sidestep immediate capital-gains taxes, as uncertainty grows over how regulators view the practice.
The industry group — which represents more than $45 trillion across various fund structures run by the likes of BlackRock Inc. and Vanguard Group, among many others— has filed a comment letter to Treasury seeking clarity around so-called 351 conversions. These transactions allow investors to move concentrated stock positions or entire portfolios into ETFs without immediately triggering capital-gains taxes.
ICI said it has had two ...