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Columbia Threadneedle Investments launches Tax Efficient Portfolios


Columbia Threadneedle Investments has launched the Columbia Tax Efficient Portfolios (TEP), a suite of equity separately managed account strategies designed to provide investors consistent equity market exposure with an emphasis on tax efficiency.

The portfolios are designed for tax-sensitive, high-net-worth investors and aim to deliver pre-tax returns that closely approximate the target benchmark and results, after taxes and investment management fees, that consistently outperform the target benchmark through the strategic use of tax lot accounting.
“We have a long history working with advisors to achieve the goals of high- and ultra-high-net-worth investors in a variety of ways, including customised tax-efficient equity and municipal-bond strategies”
TEP is managed by Michael Fulginiti, CFA and the Systematic Portfolio Solutions team, which includes portfolio managers, investment analysts and traders. The team has over twenty years of experience managing tax-efficient strategies for high-net-worth clients. Columbia Threadneedle has offered a similar tax-efficient equity strategy exclusively to institutional clients since the early 1990s.
Investors in TEP may choose from three core strategies as a starting point for their portfolio: US Large Cap, designed to track the S&P 500 Index; US All Cap, designed to track the S&P 1500 Index; and International ADR, designed to track the BoNY Classic ADR Index. Further customisation is offered to align with investors’ specific beta and after-tax alpha objectives. The investment team uses tax lot accounting strategy to harvest losses that are used to offset taxable gains and reduce taxes. A separately managed account can pass through tax losses directly to the investor, allowing for proactive tax management. The portfolio management team utilises the company’s robust technology platform to address the unique needs of high-net-worth and ultra-high-net-worth investors.
“Taxable investors and their advisors, even sophisticated ones, often overlook or ignore a significant factor that affects wealth accumulation – tax friction,” says Fulginiti, Head of the Systematic Portfolio Solutions team at Columbia Threadneedle. “Regardless of investment performance, over time tax friction can significantly erode investment returns. For those investors with significant assets and long-term investment horizons, TEP can be a valuable core or component of a portfolio that will help minimise tax drag.”
“We have a long history working with advisors to achieve the goals of high- and ultra-high-net-worth investors in a variety of ways, including customised tax-efficient equity and municipal-bond strategies,” says Dan Beckman, Head of US Product at Columbia Threadneedle. “With this new offering, we’re excited to bring our 20-plus years of experience to a broader set of advisors and investors. This demonstrates our focus on bringing forward differentiated capabilities aligned with the critical needs of our clients.”
TEP is offered only as a separately managed account through wrap fee programs, in either single contract or dual contract. The minimum investment for a TEP account is USD250,000.

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