Just got off the phone with a Fidelity advisor today, who is also recommending the use of the "Fidelity Tax Managed US equity index Strategy" which is NOT an index fund but is actually a selection of single stocks in a portfolio designed to mimic the US large cap equity index. Their assertion is that the tax drag on this portolio is even less than an index fund, and therefore tax efficient, and by aggressively employing tax loss harvesting of these stocks, they are able to beat the Large cap Equity index over the long term.
I was sent a PDFwhich did show that this tax managed strategy beat the Large Cap Index over the duration of this philosopy (12/31/2010 - 4/24/2024)
After-Tax Composite (Taxable Accounts)
Tax-Managed U.S. Equity Index Strategy (Gross of Fees) 14.50
Tax-Managed U.S. Equity Index Strategy (Net of Fees) 13.73
After-Tax Composite Benchmark Return 12.72
Unfortunately, I am not able to recreate the PDF here.
The adviser offered implement this strategy for an AUM of somewhere between 20 to 62 basis points per year. I am skeptical that this is really a worthwhile investment. I worry that I would be saddled with a cumbersome portfolio of single stocks if I were ever to exit this AUM arrangement with them. Meanwhile, they of course maintain that this is the way to beat the SP 500 over the long term, and seemed flustered that I would prefer to keep it simple with my ordinary taxable index funds and ETFs. Am I wrong?
I was sent a PDFwhich did show that this tax managed strategy beat the Large Cap Index over the duration of this philosopy (12/31/2010 - 4/24/2024)
After-Tax Composite (Taxable Accounts)
Tax-Managed U.S. Equity Index Strategy (Gross of Fees) 14.50
Tax-Managed U.S. Equity Index Strategy (Net of Fees) 13.73
After-Tax Composite Benchmark Return 12.72
Unfortunately, I am not able to recreate the PDF here.
The adviser offered implement this strategy for an AUM of somewhere between 20 to 62 basis points per year. I am skeptical that this is really a worthwhile investment. I worry that I would be saddled with a cumbersome portfolio of single stocks if I were ever to exit this AUM arrangement with them. Meanwhile, they of course maintain that this is the way to beat the SP 500 over the long term, and seemed flustered that I would prefer to keep it simple with my ordinary taxable index funds and ETFs. Am I wrong?
Statistics: Posted by Iokruok — Fri May 24, 2024 6:31 pm — Replies 6 — Views 723