Vanguard, BlackRock ETF Shuffle Lets Foreign Investors Duck US Tax

Vanguard and BlackRock are enabling foreign investors to avoid the 30% US withholding tax on dividends by frequently switching between nearly identical equity ETFs. By strategically timing these fund exchanges to coincide with ex-dividend dates, investors can receive capital appreciation while sidestepping dividend taxation. This practice raises concerns about potential tax revenue loss and whether it exploits unintended loopholes in US tax law.