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 of Active Index Advisors®, 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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The views and opinions expressed may change based on market and other conditions. This material is provided for informational purposes only and should not be construed as investment advice. There can be no assurance that developments will transpire as forecasted. Actual results may vary.

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