Tax-Efficient Portfolio Transitions Using Direct Indexing

How direct indexing can help limit the tax consequences of transitioning portfolio assets to a new account.

Kevin Maeda, Chief Investment Officer, Direct Indexing, Natixis Investment Managers Solutions, describes how to transition an existing portfolio into an index-based separately managed account with minimal tax impact.
  • There are many reasons investors may want to move their investments to a new account – but liquidating a portfolio and starting from scratch can trigger an unwanted tax bill.
  • With a separately managed account, investors can transfer selected securities to the new account, selling only as much as necessary for proper diversification.
  • Because each account is customized, investors can specify capital gains limits to minimize, delay, or avoid any net taxes.
Tax-loss harvesting is the selling of securities at a loss to offset a capital gains tax liability.

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