Tax Efficient Investing Archives

Mutual Fund to ETF Conversions: To Proxy or Not to Proxy, that is the question

By Pat Cleary|December 16th, 2022|ETF Operations, Tax Efficient Investing, ETF Investing|

ETF conversions are accelerating and we are seeing more and more mutual funds converting into ETFs. The reasons for mutual fund to ETF conversions are obvious: tax efficiency, transparency, and lower operating costs. But how does this work? What are the pro/cons? This post provides a glimpse behind the curtain and a practical guide for any asset manager considering a mutual fund conversion. Below we outline the laws behind a mutual fund conversion, options for mutual fund conversions, and the nitty-gritty behind how to optimize a mutual fund conversion.

Why Advisors (and Family Offices) Should Consider Creating their Own ETFs

By Pat Cleary|November 4th, 2022|ETF Operations, Tax Efficient Investing, ETF Investing|

Independent RIA firms seek to do what is "right" for the client, which often boils down to minimizing fees and taxes and increasing transparency/education (i.e., ETFs). But the "right" solution for an advisor's clients might not be available 'off-the-shelf' in the ETF market, or the advisor can't use ETFs because they are stuck "managing around" legacy portfolios and tax problems.

What's the solution? Allow advisors to create their own ETFs, which can be customized to deliver the specific investment program the advisor desires and allows an advisor to offer unique solutions for legacy tax issues tied to low-basis securities.

Wes Discusses Merging Education, Investing, and the Marines w/ Lagniappe Podcast

By Wesley Gray, PhD|July 5th, 2022|Podcasts and Video, Factor Investing, Tax Efficient Investing, ETF Investing|

In this episode, Wes talks with Doug and Greg about why Alpha Architect is abnormal, the method to their madness, how Wes challenged Eugene Fama (and nearly won), how Alpha Architect is responding to today’s volatile markets, and what the future looks like for value investors.

Life Insurance Instruments May Help Improve After-Tax Wealth

By Rajiv Rebello|May 25th, 2022|Research Insights, Guest Posts, Tax Efficient Investing|

Fee-only fiduciary advisors often summarily dismiss the use of life insurance solutions as financial planning tools—perhaps due to past experiences trying to get clients out of poorly structured, high expense policies. In this post, Colva Actuarial Services and Colva Capital principal Rajiv Rebello explains how fiduciary advisors can properly structure life insurance products and utilize low-expense/no-commission products to provide better after-tax diversification and returns for the fixed income portion of their clients’ portfolios as opposed to investing in bonds directly.

ETF Tax Efficiency isn’t Always Efficient

By Sean Hegarty|February 25th, 2022|Research Insights, Guest Posts, Tax Efficient Investing, ETF Investing|

Compared to mutual funds or separately managed accounts, ANY benefit from redeeming in-kind is a bonus. That being said, not all ETFs and situations are created equal when it comes to tax efficiency, and the "golden rule" always applies - when given the option, the IRS wants to create scenarios where they receive tax dollars now instead of later. Here are some big-ticket items that cause inefficiencies (read as taxes…), many related to the “golden rule” above.

How to Start an ETF? Resources and FAQ

By Pat Cleary|November 16th, 2021|ETF Operations, Research Insights, Key Research, Tax Efficient Investing, ETF Investing|

We get the following question at least 1x a day: "How do I start an ETF? Because we have so many requests for information on the topic of "How to Start an ETF?", Wes asked that I compile a list of materials on the topic and a "FAQ" to address all of your burning questions.

Jack Discusses Value Investing on Meb Faber Show

By Wesley Gray, PhD|September 22nd, 2021|Podcasts and Video, Factor Investing, Tax Efficient Investing, ETF Investing|

Here is a link to our recent chat on The Meb Faber Show regarding the details on Value Investing: An Examination of the 1,000 Largest Firms: Among stock investors, a common strategy/belief held is Value [...]

How to Launch an ETF with Meb, Patrick, and Wes

By Wesley Gray, PhD|September 6th, 2021|Podcasts and Video, Factor Investing, Tax Efficient Investing, ETF Investing|

Here is a link to our recent chat on The Meb Faber Show regarding the details on how to launch an ETF: This topic is up your alley, feel free to go back and listen [...]

The Costs and Benefits of Tax-Loss-Harvesting (TLH) Versus an ETF

By Wesley Gray, PhD|June 11th, 2021|Research Insights, Tax Efficient Investing, ETF Investing|

Recently, we have experienced a rush of questions from investors/clients who seek our opinion on direct indexing/tax-loss-harvesting ("TLH") and how it compares to the potential tax benefits of an ETF. Unfortunately, there is no easy [...]

Selling a Business? Here are 8 Ways to Minimize Your Taxes:

By Adam Tkaczuk|June 8th, 2021|Research Insights, Guest Posts, 1042 QRP Solutions, Tax Efficient Investing|

When an owner sells their business, the IRS and state taxing authorities will be there to take as much of it as they lawfully can. This one sale can lead to the largest tax payment [...]

How to Optimize Fixed Annuity Tax Deferral

By Aaron Brask|September 3rd, 2020|Financial Planning, Guest Posts, Tax Efficient Investing|

Annuities are popular tools for retirement income planning. While stigmas exist around some annuity products (for good reason), recent research shows how fixed annuities can add value in the context of retirement income. In addition [...]

Foreign Dividend Withholding Tax Refunds: A Practical Walkthrough

By Julia Bricker|May 22nd, 2020|Guest Posts, Other Insights, Tax Efficient Investing|

The world of withholding tax recovery on foreign dividends and interest is woven with intricacies, challenges, and a general lack of transparency. This is mainly due to its complexities and the cumbersome process involved in [...]

Boutique ETF Issuers Finally Get a Break!

By Ryan Kirlin|October 15th, 2019|Tax Efficient Investing, ETF Investing|

Lingchi is the Chinese term for the form of torture we know as “death by 1000 cuts” that was reportedly used from 900 CE until it was banned in 1905. It is also translated as [...]

Equity Compensation Planning in a TCJA World

By Robinson Crawford, CFP®|June 6th, 2019|Financial Planning, Research Insights, Guest Posts, Tax Efficient Investing|

Employee equity & stock options are a major part of the modern compensation plan. That's certainly the case for my financial planning clients. Unfortunately, a search for the best approach to managing your equity opens [...]

Compound Your Knowledge Ep. 13: Opp. Zone Investments, Hiring Losers, & Short Selling w/Insider Buying

By Jack Vogel, PhD|May 21st, 2019|Compound Your Knowledge, Research Insights, Podcasts and Video, Media, Tax Efficient Investing|

In this week's video, we examine three articles. The first article, written by Adam Tkaczuk, covers a method to make an opportunity zone (equity) investment behave more like a bond. The second article, written by Larry [...]

Structuring Lower Risk Opportunity Zone Investments

By Adam Tkaczuk|May 16th, 2019|Financial Planning, Research Insights, Guest Posts, Tax Efficient Investing|

The tax benefits of the new Opportunity Zone program are potentially phenomenal. However, when you dig into the details of the program you quickly realize that many of the investment options are typically higher-risk and [...]

Tax-Managed Factor Strategies

By Tommi Johnsen, PhD|May 6th, 2019|Research Insights, Basilico and Johnsen, Academic Research Insight, Tax Efficient Investing|

Tax-Managed Factor Strategies Lisa R. Goldberg , Pete Hand , and Taotao CaiFinancial Analysts JournalA version of this paper can be found hereWant to read our summaries of academic finance papers? Check out our Academic Research [...]

Buyer Beware: The Reality of Tax-Loss Harvesting Benefits

By Maneesh Shanbhag|April 26th, 2019|Research Insights, Guest Posts, Tactical Asset Allocation Research, Tax Efficient Investing|

Executive Summary Tax loss harvesting is widely promoted, but we think the benefits are generally misunderstood and often overstated.[ref]a recent paper highlighted by Wes on twitter comes to a similar conclusion. Here is a discussion [...]

1042 QRP: How to Finance a Seller Note

By Doug Pugliese|January 23rd, 2019|Research Insights, 1042 QRP Solutions, Tax Efficient Investing|

Employee Stock Ownership Plans (“ESOP”) create unique opportunities for business owners and their employee-participants to build wealth through their companies. To foster broader adoption of ESOPs, Congress instituted a number of attractive tax advantages benefitting [...]

Is Active Alpha Enough to Cover Taxes?

By Larry Swedroe|December 26th, 2018|Research Insights, Larry Swedroe, Tax Efficient Investing|

Each time S&P Dow Jones Indices publishes its latest Active Versus Passive Scorecard, the persistent failure of the vast majority of actively managed funds to outperform is highlighted. The evidence on this failure led Charles [...]

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