Managing Tax Costs with Index-Based Separate Accounts
Watch this overview of Natixis tax management solutions using customized separate accounts to help maximize after-tax returns.
Natixis Investment Managers Solutions Direct Indexing provides fully customizable SMAs that seek to match index returns pre-tax while producing enhanced after-tax returns. These separately managed account portfolios can be customized for tax purposes, to align with investor values and concerns, or a combination of both.
- Maximizing after-tax return
- Transitioning investment accounts
- Unwinding concentrated positions
- Estate planning
- Selling a business
- Specific GICS sectors, industries, or individual securities
- Investment styles, such as value, dividend, or growth tilts3
- Environmental, social, and governance (ESG) criteria
- Racial equity investment portfolios
A Smarter Way to Index
The managers view indexes as raw ingredients that can be adapted to each client’s goals, using a robust set of proprietary tools and techniques. From planning through execution, direct indexing can provide a customized investment experience with five types of index-based strategies.
The flexibility of the separate account structure allows the portfolio managers to use tax loss harvesting techniques to sell securities that have lost value and bank those losses. The accrued losses can then be used to offset gains in other parts of the client’s portfolio.
- The Core Equity Plus strategies use a multi-factor risk model and optimizer to maximize expected excess return relative to the target index.
- Custom Smart Beta6 and Factor Tilt strategies – such as high dividend, momentum, value or multi-factor – are designed to offer better risk-adjusted return than respective market cap weighted benchmark.
- Positive ESG screens favor stocks that have a positive ESG rating or are best in class within their sector.
- Negative screens exclude specific securities based on sustainability, faith, or values-based guidelines.
- Invests in companies that are leaders in or help to promote diversity, equity and inclusion.
- Avoids companies that cause, contribute to, exploit or profit from racial injustice.
- Conservative, Moderate, Aggressive, and Global Equity portfolios
- Conservative and Aggressive Income portfolios
Investor Applications for Direct Indexing
Learn how a direct indexing strategy can help control the tax impact of diversifying a concentrated stock position.
Learn why direct indexing with a separately managed account (SMA) is more tax-efficient than an index fund or ETF.
Discover how direct indexing can help minimize the tax consequences of transitioning portfolio assets to a new account.
2 Capital gain is a rise in the value of a capital asset (investment or real estate) that gives it a higher worth than the purchase price.
3 A portfolio tilt is an investment strategy that overweights a particular investment style.
Natixis Advisors, LLC does not provide tax advice. Please consult with your financial advisor or tax professional.
Investing involves risk, including the risk of loss.
Sustainable investing focuses on investments in companies that relate to certain sustainable development themes and demonstrate adherence to environmental, social and governance (ESG) practices; therefore a portfolio’s universe of investments may be reduced. It may sell a security when it could be disadvantageous to do so or forgo opportunities in certain companies, industries, sectors or countries. This could have a negative impact on performance depending on whether such investments are in or out of favor.