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Tax-Managed SMAs Better Than ETFs

Exchange traded funds, or ETFs, are popular vehicles for investors seeking passive, index-based market exposures. Despite their popularity, there are structural issues which make them less than ideal for many high net worth investors. For these investors, a tax-managed, separately managed account (tax-managed SMA) can be designed to deliver the same diversified index-like exposure while offering increased after-tax returns. Parametric research has shown that this return advantage can be as large as 2% annually on an after-tax basis. Additionally, tax-managed SMAs allow greater control over the underlying securities, which can help to make portfolio transitions more tax efficient, and allow for customizations to reflect an individual’s investment objectives, and include their responsible investing views.
 
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Rey Santodomingo

Rey Santodomingo, CFA

Director of Investment Strategy – Tax Managed Equities
Rey Santodomingo

Rey Santodomingo, CFA

Tim Atwill
Tim Atwill, Ph.D., CFA

Head of Investment Strategy

 

 

Tim Atwill
Tim Atwill, Ph.D., CFA
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