A Couple Ideas for the Strategic AA Crowd

March 31st, 2009 by Mebane Faber

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Besides tax harvesting (selling holdings at losses and switching to a similar index fund), why not move into a fund with big negative capital gains exposure? From Morningstar:

Today, most stock funds in the Morningstar 500 have negative potential capital gains exposure of between 10% and 50%, but there are some good ones with even more. The highest of all is Fidelity Electronics (FSELX), with a negative PCGE of 509%.

The other idea would be swapping into CEFs trading a big discounts. CEF discount sorter here.

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