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.

Our tax-efficient direct indexing strategies seek to match index returns pre-tax while producing enhanced after-tax returns. These separately managed account (SMA) portfolios can be customized for tax purposes, to align with investor values and concerns, or a combination of both.

A Smarter Way to Index

The managers view indexes as raw ingredients that can be adapted to each investor’s goals, using a robust set of proprietary tools and techniques.

Investors often focus on fees, but in many cases taxes have a greater impact on bottom line investment returns. Tax-managed SMA strategies seek to track index performance before taxes, but outperform after taxes, using techniques not available with traditional mutual funds or ETFs.

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 investor’s portfolio.
We offer packaged and custom quantitative investment strategies.

• 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 Beta and Factor Tilt strategies – such as high dividend, momentum, value or multi-factor – are designed to offer better risk-adjusted return than the respective market cap weighted benchmark.
We use proprietary methodology to apply environmental, social and governance (ESG) factors to create customized index portfolios.

• Positive ESG screens favor stocks that have positive ESG characteristics or are best in class within their sector.
• Negative screens exclude specific securities based on sustainability, faith, or values-based guidelines.
The approach is designed to track the S&P 500® reasonably closely pre-tax, but with a deliberate focus on racial equity and justice.

• 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.
Using a disciplined and systematic approach, these broad, strategically allocated ETF portfolios offer proactive tax loss harvesting and rebalancing. Comprehensive services focus on duration management in the fixed income allocation and ongoing portfolio monitoring and enhancement.

• Conservative, Moderate, Aggressive, and Global Equity portfolios
• Conservative and Aggressive Income portfolios



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