Update why-etfs-are-more-popular-than-mutual-funds-in-the-u.s.md

Shruthi1204 · web-flow · commit 434e473c17c4 · 2025-02-20T14:32:16.000+05:30
diff --git a/content/blog/why-etfs-are-more-popular-than-mutual-funds-in-the-u.s.md b/content/blog/why-etfs-are-more-popular-than-mutual-funds-in-the-u.s.md
@@ -13,4 +13,4 @@ Something I learned recently on why ETFs in the US are preferred over MFs. 😬
 
 US mutual funds are pass-through vehicles—if they generate capital gains, these must be distributed to unit holders who pay the taxes on the gains which makes MFs less tax-efficient. ETFs avoid this through 'in-kind' creation/redemption that washes away gains. This tax advantage is significant. This is one underrated reason for the popularity of index funds, especially ETFs in the US.
 
-In India, both MFs and ETFs don't pass taxes to unit holders, while PMS and Cat 3 AIFs do.
+In India, both MFs and ETFs don't pass taxes to unit holders, while PMS and CAT 1 and 2 AIFs taxes are passthrough.

Original file line number	Diff line number	Diff line change
`@@ -13,4 +13,4 @@ Something I learned recently on why ETFs in the US are preferred over MFs. 😬`
`13`	`13`
`14`	`14`	`US mutual funds are pass-through vehicles—if they generate capital gains, these must be distributed to unit holders who pay the taxes on the gains which makes MFs less tax-efficient. ETFs avoid this through 'in-kind' creation/redemption that washes away gains. This tax advantage is significant. This is one underrated reason for the popularity of index funds, especially ETFs in the US.`
`15`	`15`
`16`		`-In India, both MFs and ETFs don't pass taxes to unit holders, while PMS and Cat 3 AIFs do.`
	`16`	`+In India, both MFs and ETFs don't pass taxes to unit holders, while PMS and CAT 1 and 2 AIFs taxes are passthrough.`