Tax Aware

Portfolios Emphasize Increased Tax Efficiency - with the Goal of Reducing Overall Tax Liability

This style of active management utilizes an all-weather approach to investing paired with a heightened sensitivity to the tax implications of investment decisions.  During regular portfolio exchanges and rebalancing – this strategy considers the tax consequences of any realization of capital gains and losses.

Because tax-efficient funds have a low
tax liability, they are often good 
investments to make outside of a 
tax-deferred account.

What are the Primary Objectives?

  • Increased Focus on Taxes: Our portfolio managers are always mindful of tax efficiency. However, we prioritize tax consequences higher in the Tax Aware portfolios than our other offerings by emphasizing managers and investment strategies that have historically produced tax-efficient capital growth.

  • Excess Return Potential: These models will exhibit exposure to investment themes that are highly compelling in the current environment and will focus on implementing those themes through tax conscious management. Balancing tax concerns and return potential, managers position the portfolio to pursue both objectives.

  • Tactical Risk Positioning: The Tax Aware portfolios have the flexibility to exhibit risk positioning that is different than their respective benchmarks. The variations will be driven primarily by views on the market as well as the impact any changes to portfolio positioning would have on the portfolios’ prevailing levels of tax efficiency.

How is this Achieved?

  1.  By purchasing tax-free or low taxed investments
  2.  Keeping turnover low
  3.  Avoiding or limiting income-generating assets such as those with high dividends

Managers who disregard the tax consequences of their trading can generate very concrete and immediate tax costs.  Rebalancing without factoring in gains often results in realizing such a large amount of capital gains that pretax returns might be completely offset by taxes on those gains. 

After all, wealth compounds after tax.

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*Biblically Responsible Investing (BRI) has certain risks based on the fact that the criteria excludes securities of certain issuers for non-financial reasons and, therefore, investors may forgo some market opportunities and the selection of investments available will be smaller.