Benefits

At the core of Aperio’s investment methodology is a simple equation: less taxes equals greater wealth. Our quantitative approach has a track record of maximizing after-tax returns on an investing platform built around portfolio customization. Depending on the client’s tax situation, the improvement equals an estimated 0.80% to 1.75% per year in incremental return (before fees) over a 10 year period versus a comparable index fund or ETF. This “tax alpha” is more predictable at lower incremental risk than attempts to raise pre-tax performance.

Aperio’s full suite of strategies and client services offers crucial tools for advisory firms. We understand that the financial advisory business is highly competitive. RIAs need trusted, sophisticated partners (not just vendors) that can deliver effective solutions to their clients’ unique needs.

One of the biggest challenges with new and prospective clients is transitioning existing portfolios, which may be spread over multiple accounts, trust structures, and firms. The critical tasks of consolidating and modifying these portfolios often trigger taxable events. We can analyze existing accounts and map out several “transition strategies” for minimizing the tax impact. Whether it’s local and state taxes, AMT status, estate planning issues, trust structures, tax-efficient charitable gifting, concentrated positions, or other complications, we can help smooth a transition’s rough edges.

The financial science of indexing, tax management, and portfolio customization share a proven record of helping advisors and their clients achieve their financial goals—on their terms and at a low cost.

“Why are the tax bills so high? Because turnover’s too high. The mutual fund managers are trading the portfolios as if taxes don’t matter, and taxes do matter. And they’re trading the portfolios as if transactions cost and market impact don’t matter, and they do matter.”

– David Swensen, Yale University Endowment

Library

  • ETFs vs SMAs – Benefits summary of using separately managed accounts over ETFs for indexing exposure
  • After-Tax Information Ratio – Introduction to Aperio research on After-Tax Information Ratio – a statistic that measures ability to generate excess return per unit of risk.