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Portfolios 206: The Best Investments for Taxable Accounts

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1.
Variable annuities (VAs) are a kind of hybrid between mutual funds and _______.
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Insurance. Variable annuities are essentially mutual funds wrapped in an insurance package.
2.
A tax-managed fund can't be considered tax-managed if it contains large companies, since large companies are more likely to pay dividends than smaller ones.
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False. There are plenty of large companies that qualify to be in tax-managed funds. They simply don't need to be paying dividends.
3.
What are exchange-traded funds?
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Index funds that trade on an exchange. ETFs are generally index funds that trade like stocks on an exchange.
4.
Imagine you're a tax-sensitive investor. Which is the better bond for you?
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It depends on your tax bracket. Investors in high tax brackets may benefit more from a muni--even if it has a lower yield--due to the tax break.
5.
When selling stock, you can sometimes reduce your capital gains if you sell only certain shares and not others.
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True. If the shares were bought at different prices, you can specify that shares bought at higher prices be sold, which can then lower your capital gains.