Why Invest in an ETF Instead of a Mutual Fund

There are certain tax benefits to an ETF that a Mutual Fund does not have

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Suppose a farmer invests has an option to invest $100,000 in the XYZ mutual fund or the XYZ ETF during 2024. Both the mutual fund and the ETF track the exact same index of stocks and has the same fee structure. Which is the better investment from a tax standpoint?

At year-end, the mutual fund will issue a 1099 showing $1,000 of dividend income and $5,000 of long-term capital gains which is taxable on their 2024 tax return.

The ETF will issue a 1099 showing only the $1,000 dividend income.