Below is a snapshot from a marketing deck I’ve been working on.

I’m shifting the majority of my very limited brainpower into the field of tax-alpha and away from traditional alpha. Why? Because traditional alpha doesn’t matter anymore.

See below for a quick example. The hurdle for tax-inefficient alpha has become so high, a manager has to nearly double the returns on a risk exposure to add after-tax value.

The analysis below doesn’t even include state taxes. If you are in CA, NJ, or NY, these numbers are even uglier.

2013-05-06 16_04_51-tax_mgmt_v01


The results are hypothetical results and are NOT an indicator of future results and do NOT represent returns that any investor actually attained. Indexes are unmanaged, do not reflect management or trading fees, and one cannot invest directly in an index. Additional information regarding the construction of these results is available upon request.

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