When Wealthfront changes the preferred ETFs for an asset class, how will we transition accounts?
When our opinion of the best ETFs in a category changes, we will change what we buy for our clients. We will stop buying the old ETF and start buying the new one with: (a) new funds deposited into the account; (b) funds freed up through selling of old instruments; and, (c) tax-efficient sales of the alternate ETF.
If we replace an ETF with another ETF which tracks the same benchmark (e.g. as in the MUB to VTEB transition), we will take special precautions to avoid wash sales, which could be triggered by the simultaneous sale of one ETF at a loss and purchase of the other. To mitigate this possibility we will generally buy another security in the same category that tracks a different benchmark, and then wait 30 days before selling that security if it is at loss and buying the primary.
This communication has been prepared solely for informational purposes only. Nothing in this communication should be construed as an offer, recommendation, or solicitation to buy or sell any security or a financial product. Any links provided to other server sites are offered as a matter of convenience and are not intended to imply that Wealthfront or its affiliates endorses, sponsors, promotes and/or is affiliated with the owners of or participants in those sites, or endorses any information contained on those sites, unless expressly stated otherwise.
Wealthfront offers a free software-based financial advice engine that delivers automated financial planning tools to help users achieve better outcomes. Investment management and advisory services are provided by Wealthfront Advisers LLC, an SEC registered investment adviser, and brokerage related products are provided by Wealthfront Brokerage LLC, a member of FINRA/SIPC.
Wealthfront, Wealthfront Advisers and Wealthfront Brokerage are wholly owned subsidiaries of Wealthfront Corporation.
© 2020 Wealthfront Corporation. All rights reserved.
Comments are moderated prior to publication
Still need help?
Our support team has your back.Contact us