Gaining Perspective
Is Direct Indexing Right for Your Clients?
Jan 2, 2024
The podcast discusses the importance of tax management strategies for separately managed accounts, including tax-loss harvesting and tax-efficient portfolio rebalancing. It explores the origins of tax-efficient investing and the advantages of separately managed accounts over mutual funds and ETFs. The podcast also delves into the application of indirect indexing techniques to actively managed products and the implementation details of direct indexing in the fixed income space. It emphasizes the role of technology in managing customized accounts and highlights the potential burden of tax loss harvesting benefits on less wealthy investors. Additionally, it discusses trends in tax loss harvesting and asset allocation, including the gravitation towards manager traded separately managed accounts for maximizing tax efficiency.
31:39
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Quick takeaways
- Having a comprehensive tax management strategy is critical for maximizing returns in separately managed accounts (SMA), which involves tax loss harvesting and tax-efficient portfolio rebalancing techniques to minimize overall tax liability.
- Tax loss harvesting in the fixed income space requires a scalable investment platform and careful portfolio construction, and All Spring Global Investments' blended approach of fundamental research and systematic portfolio construction enables them to efficiently harvest losses while ensuring credit quality and diversification.
Deep dives
Tax-efficient investment strategies in separately managed accounts
Having a comprehensive tax management strategy is critical for maximizing returns in separately managed accounts (SMA). Tax loss harvesting and tax-efficient portfolio rebalancing are key components of a tax management strategy. Techniques such as pairing gains against losses, avoiding short-term gains, or trapping gains can minimize overall tax liability. The advancements in technology have made tax-efficient, customized SMAs more accessible and scalable, making them the preferred vehicle for the future. All Spring Global Investments has built a platform called Remy, which helps in delivering scalable and customized tax-efficient investment solutions.
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