Income and Tax Strategies with Fidelity’s Craig Ebeling

On this week’s episode of ETF Prime, Cullen Rogers, Chief Investment Officer of Wedbush Fund Advisors, joins Nate Geraci to discuss AI-themed ETFs. Later, Craig Ebeling, Head of ETF Strategy at Fidelity Investments, shares insights on navigating today’s market landscape and the evolving role of income-focused ETFs.

With the Federal Reserve cutting interest rates, Ebeling emphasized the growing need for investors to rethink their approach to generating income as yields on money market funds decline. He outlined three primary ETF categories for income, including dividend-focused ETFs, fixed income ETFs, and options-based strategies. 

Ebeling also emphasized the importance of mitigating unintended risks in dividend strategies. Furthermore, he highlighted the advantages of active management in fixed income (especially amid uncertainty around rates and inflation). He cautioned investors to fully understand the trade-offs and tax implications of high-yielding options-based ETFs, particularly those promising outsized returns.

He also offered a timely reminder on tax loss harvesting, explaining how investors can use it to offset capital gains, especially by focusing on ETFs with negative price returns, even if the total return is positive. While many wait until Q4 to implement these strategies, Ebeling encouraged year-round vigilance to capture opportunities during market drawdowns.

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