Tax-Aware Trading

For taxable investors, final investment outcomes may be significantly altered by the impact of taxes on income and capital gains. Logia exercises an array of strategies to reduce taxes and improve the after-tax returns in our client portfolios.

Avoiding Short-Term Capital Gains - The difference between short-term capital gains taxed as ordinary income and long-term capital gains is substantial. Logia understands the detrimental impact short-term gains can have to clients, and manages portfolios to limit trades that will trigger short-term capital gains.

Regular Tax Loss Harvesting – Securities sold for less than their purchase price generate realized losses that can be used to offset taxes from trades that generate capital gains. The strategy of harvesting losses to offset gains is not new or unique. However, many managers and investors limit the strategy to year-end as the tax year is closing. Logia capitalizes on opportunities to harvest losses throughout the year to take full advantage of this strategy.

Tax-Efficient Rebalancing – Portfolios should be rebalanced when market movements or cash flows create unacceptable dispersion from the target allocation. Logia carefully evaluates trades, when rebalancing is needed, to identify a tax-efficient approach to realign the portfolio.

Tax-efficient Distributions – Likewise, when distributions are required from a portfolio, sales of securities may be required to meet cash needs. Logia evaluates the portfolio to determine tax-efficient trades to meet liquidity needs.