ETFs are more tax-efficient than LP investments because you only pay capital gains tax when you sell, while LPs issue annual K-1 forms that create taxable income every year whether you sell or not.
ETFs are also more tax efficient. Typically, if you buy an ETF and hold it for more than a year, it gets taxed just like a stock from the perspective of being charged capital gains at the point of sale, which is very different from traditional LP investments, which typically generate K-1 income that you have to take annually regardless of whether or not you sell out of the position and you're taxed on those gains and have to pay the taxes on an annual basis.
