Taxes are one of the few certainties in investing, and they can significantly impact overall returns.
With Symmetry’s Tax Alpha Program, investors with $1 million+ taxable accounts can substantially limit--or even eliminate--the long-term impact of capital gains taxes.
Investment success often comes at a steep cost—taxes. Depending on your tax bracket and the state where you live, long-term capital gains taxes could be as high as 40.8%, turning $1 million in gains into $408,000 in taxes, leaving just $592,000.
Taxes are one of the few certainties in investing. Traditionally, there have been few ways to minimize their impact. You could choose not to sell, but potential gains will just keep accumulating, and you won’t be able to enjoy the returns you’ve earned. Or you could invest in tax-managed funds or ETFs that focus on minimizing capital gains. But this may not offer enough personalization and customization for larger portfolios.
Direct Indexing is another, more recent solution. Owning individual stocks allows for a higher degree of tax management and customization that pairs losses with gains to reduce your overall tax burden. Unfortunately, the tax benefits of Direct Indexing typically disappear after 4 – 5 years. You can extract no further tax savings from your portfolio. It becomes “frozen.”
To specifically solve these tax management challenges, Symmetry Partners has developed an innovative Tax Alpha Program. Not only can it solve the problem of “frozen” portfolios, providing 15, 20, or even more years of tax savings, it can also address other typical situations, such as transitioning from a highly concentrated portfolio, transitioning from one portfolio to another, or simply delivering a tax-efficient overlay on globally diversified portfolio with minimal capital gains.
At the heart of all Tax Alpha strategies is a unique use of margin to borrow cash from your account using stocks, bonds, ETFs, or other assets as collateral.
We use this borrowing power to build an extension that is typically 30% of account value long & 30% of account value short. (additional, more aggressive strategies are also available)
The 30% long & 30% short comprise hundreds of individual stocks that are different from any stocks you currently hold.
As markets fluctuate over time and these hundreds of stocks rise/fall, we use a systematic process focused on harvesting tax benefits for you.
Because some long stocks decline when markets fall and some short stocks decline when markets rise, this long/short approach may allow for more consistent tax benefits year after year, than typical tax loss harvesting.
Even after fees and expenses, typical tax savings range from 2% - 4% each year. **
** Source: Quantinno
When it comes to taxes, delay and inaction can be expensive. The Symmetry Tax Alpha Program may help you realize substantial long-term tax savings while addressing other challenges such as concentration risk. Join us as we discuss our innovative Tax Alpha Program and how it can solve the tax management challenges of Direct Indexing.
Portfolio of individual stocks managed to mitigate risk with a goal to achieve strong, consistent tax benefits.
Using current portfolio to help generate ongoing tax benefits.
Transition current portfolio to new portfolio in a tax-efficient manner.
Tax-efficiently diversify one to a few equity holdings into a more diversified stock portfolio.
When it comes to taxes, delay and inaction can be expensive. The Symmetry Tax Alpha Program may help you realize substantial long-term tax savings while addressing other challenges such as concentration risk.
Your financial advisor, in partnership with Symmetry, can help you select and implement the right Tax Alpha strategy to enable long-term tax savings.
This material is for educational purposes and its intended use is for financial professionals.
Symmetry Partners, LLC is an investment advisory firm registered with the Securities and Exchange Commission. The firm only transacts business in states where it is properly registered or exempted or excluded from registration requirements. Registration with the US SEC or any state securities authority does not imply a certain level of skill or training. Symmetry charges an investment management fee for its services. All Symmetry fees can be found in the Symmetry ADV Part2A located on the website at www.symmetrypartners.com. Past Performance does not guarantee future results. All data is from sources believed to be reliable but cannot be guaranteed or warranted. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product, or any non-investment-related content, referred to directly or indirectly in this material will be profitable, or prove successful. As with any investment strategy, there is the possibility of profitability as well as loss. Please note that you should not assume that any discussion or information contained on this website serves as the receipt of, or as a substitute for, personalized investment advice from Symmetry Partners.
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Symmetry does not provide tax advice. Please note that (I) any discussion of U. S. tax matters contained in this material cannot be used by you for the purposes of avoiding tax penalties; (ii) this communication was written to support the promotion or marketing of the matters addressed herein; and (iii) you should seek advice based on your particular circumstances from an independent tax advisor.
ESG (Environmental, Social and Governance) Investing Risk: ESG Investments may not be perfectly correlated to the broader market indexes they seek to replicate. Stocks screened by the index sponsor for ESG criteria may underperform the stock market as a whole or particular stocks selected for the Index will, in the aggregate, trail returns of other funds investment strategies screened for ESG criteria. The individual companies deemed eligible by the index provider may not reflect the beliefs and values of any particular investor and may not exhibit positive or favorable ESG characteristics. The components of the Index are likely to change over time.
Axiom Program Risks: The Symmetry Axiom program provides clients with individual security portfolio solutions designed around individual client preferences. The Axiom separately managed accounts (Axiom SMAs) can be index- or factor-based. The index-based solutions are designed to give clients exposures similar to popular market indices, with far fewer individual security positions. The factor-based solutions are designed to emphasize those factors [need to define/describe factors or refer to somewhere in the ADV where they are already described] the Research/Portfolio Management team believes will optimize risk-adjusted return. Both index-based and factor-based portfolios hold individual securities.
Tax-loss harvesting involves certain risks, including, among others, the risk that the new investment could have higher costs than the original investment and could introduce portfolio tracking errors into your accounts. There may also be unintended tax implications. Prospective investors should consult with their tax or legal advisor prior to engaging in any tax-loss-harvesting strategy.