The Wall Street Journal - USA (2020-12-07)

© 2020 Dow Jones & Company. All Rights Reserved. **** THE WALL STREET JOURNAL. Monday, December 7, 2020 |R1

• AskEncore

For those who have

been forced into

retirement, there is

some encouraging

news, writes columnist

Glenn Ruffenach.R3

JOURNAL REPORT•A Monthly Analysis

INVESTING IN FUNDS&ETFS

S

hare buybacks:Yeaornay?

For investors, one of the big results of

the election could wind up being the fate

of corporate stock buybacks. The widely

used financial tool—which has been a

source of support for the record-setting

stock market—has been attacked by

some academics and progressive politi-

cians. Now, those politicians will be in a

better position to do something about it.

Buybacks have been a particularly hot issue since

2018 when, under terms of the Trump administra-

tion’s corporate tax cuts, big U.S. companies repatri-

ated billions of dollars that had been stashed for

years in overseas tax havens. In the resulting binge,

the dollar value of big companies’ repurchases of

their own stock shot up 55% to a record $806 billion.

Buyback foes complained that such repurchases en-

riched shareholders, generally wealthier Americans,

at the expense of workers, new plants and research,

and broader economic development

Buybacks are down about 30% this year, as compa-

nies conserve cash to ride out the pandemic. But the

issue remains prominent for Democrats who just took

the White House and retained the House.

With that in mind, here is what investors need to

know about buybacks—and why they are controversial.

What is a stock buyback?

It occurs when a company uses some of its cash to re-

purchase its own shares. Other choices include investing

PleaseturntopageR7

KLAWE RZECZY

The

Battle

Over

Buybacks

They have been attacked by

many progressive politicians.

Things could soon get

even more heated.

BYRANDALLSMITH

• TheMarkets

Usually, economic

uncertainty isn’t

good for stocks.

But is this like the

Roaring ’20s?R8

IRA

Relief

The 10% penalty for

early withdrawals

isn’t set in stone.

There are ways to

legally avoid it.R3

Inside

• FundResults

Mutual-fund and

ETF monthly

data on pages R4

and R6 and at

WSJMarkets.com

13.4%

SCOREBOARD

November 2020 fund performance,

total return by fund type. More on R2.

U.S.

stocks*

Intl.

stocks*

Bonds

(intmd.)

Source: Refinitiv Lipper

*Diversified funds only, excluding sector

and regional/country funds

13.3% 1.4%

Invesco Distributors, Inc.

Beforeinvesting,considertheFund’sinvestmentobjectives,risks,chargesandexpenses.Visit

invesco.com/fundprospectus for a prospectus containing this information. Read it carefully before investing.

NOTFDICINSURED|MAYLOSEVALUE|NOBANKGUARANTEE

There are risks involved with investing in ETFs, including possible loss of money. ETFs are subject to risks similar to those of stocks. Investments focusedinaparticularsector,suchastechnology,aresubjectto

greaterrisk,andaremoregreatlyimpactedbymarketvolatility,thanmorediversifiedinvestments.

TheNasdaq-100 Indexcomprises the 100 largest non-financial companies traded on the Nasdaq. An investment cannot be made directly into an index.

HelppoweryourportfoliowiththeinnovatorsoftheNasdaq-100.

You don’t need to be a helioseismologist

tohelpharnessthepowerofthesun.