In this video series, you will learn about whether investing in mutual funds or ETFs might be the right choice for you based on your current financial situation and goals. To open a brokerage account, visit: https://www.fidelity.com/open-account/overview To watch more videos in this series, visit: https://www.youtube.com/playlist?list=PLGKKmEmJDSiKoM-mD24lmaUeupHP62cDW To see more videos from Fidelity Investments, subscribe to: https://www.youtube.com/fidelityinvestments Facebook: https://www.facebook.com/fidelityinvestments Twitter: https://www.twitter.com/fidelity Google+: https://plus.google.com/+fidelity LinkedIn: https://www.linkedin.com/company/fidelity-investments -------------------------------------------------------------------------------------------------------------------------------------------------------------------- Amy is an investor that finds herself in a high tax bracket, and is quite concerned with this situation. She needs an investment that offers her tax efficiency in her taxable account. After some research, Amy has found that if a mutual fund and an ETF are similar, the ETF, in general, has the potential to be more tax efficient than the mutual fund. Why is that? Let’s say Amy owns shares in an ETF, and another shareholder decides to sell some of his shares. That shareholder simply sells the shares to another investor…very similar to selling a stock. There would generally be no capital gains transactions for the ETF as a whole, or for the other shareholders of the ETF. However, if Amy owns shares in a mutual fund, and another shareholder decides to sell some of his shares, the mutual fund may need to sell some securities to raise the cash needed to meet that redemption. This action may incur capital gains for ALL of the mutual fund’s shareholders. Amy does not want her exposure to taxes impacted by the action of other shareholders. For this reason, she opts to invest in the ETF. And Amy is also happy to learn that, at Fidelity, she has access to research tools to help find and evaluate ETF investments. And numerous choices, including Fidelity’s sector ETFs and iShares\u00ae ETFs, which she can buy commission-free online. Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, Rhode Island, 02917 682198.2.0