Custom Direct Investing Strategies seek to Add 1-2% after tax alpha above the benchmark.
Add Value Through Consistent Tax Alpha
Custom Direct indexing is an investment strategy that involves purchasing the underlying shares of an index, rather than owning an index mutual fund or exchange-traded fund (ETF).
Neuberger Berman CDI strategies seek to add 1 -2% after tax alpha above the benchmark by deferring taxes and harvesting losses within a customized managed account.
Given its customization, control and tax-efficiency advantages, direct indexing has seen significant growth in assets under management (AUM) from approximately $100 billion in 2015 to approximately $350 billion USD in 2020. Morgan Stanley estimates that direct investing will grow to $1.5 trillion Assets under management by 2025. Custom direct indexing has now been made available in Canada. McRae Wealth Management Group has recently acquired direct indexing capabilities with one of our in-house partners Neuberger Berman and is pleased to offer this strategy to our clients.
Strategic Tax Management:
Add Value through Tax Alpha: As mentioned above, seek to add 1-2% after tax alpha above the benchmark by deferring taxes and harvesting losses within a customized managed account.
More Precise Loss Harvesting Opportunity: Separately managed accounts provide loss harvesting opportunity to offset gains within a broader wealth profile than generic ETF’s, mutual funds or tax-unaware management.
Exploit Unavoidable Short-term Volatility: We believe that clients should take advantage of the unavoidable short-term volatility in their equity allocation to help strategically manage taxes.
Gifting Opportunities: Appreciated securities within Neuberger Berman CDI strategies can be gifted, included within a broader estate plan or held until a suitable liquidation opportunity arises.
Direct indexing allows us to build portfolios that reflect your personal values, preferences and objectives while benefiting from enhanced tax optimization. We encourage you to ask us about direct indexing and how this strategy can help you reach your investment goals.
Contact McRae Wealth Management Group here
wayne.mcrae@rbc.com
Phone: 514-630-5240
Fax: 514-630-0889
Toll-Free: 1-800-510-6470
Disclaimer
This information is not investment advice and should be used only in conjunction with a discussion with your RBC Dominion Securities Inc. Investment Advisor. This will ensure that your own circumstances have been considered properly and that action is taken on the latest available information. The information contained herein has been obtained from sources believed to be reliable at the time obtained but neither RBC Dominion Securities Inc. nor its employees, agents, or information suppliers can guarantee its accuracy or completeness. This report is not and under no circumstances is to be construed as an offer to sell or the solicitation of an offer to buy any securities. This report is furnished on the basis and understanding that neither RBC Dominion Securities Inc. nor its employees, agents, or information suppliers is to be under any responsibility or liability whatsoever in respect thereof. The inventories of RBC Dominion Securities Inc. may from time to time include securities mentioned herein. RBC Dominion Securities Inc.* and Royal Bank of Canada are separate corporate entities which are affiliated. *Member-Canadian Investor Protection Fund. RBC Dominion Securities Inc. is a member company of RBC Wealth Management, a business segment of Royal Bank of Canada. ® / TM Trademark(s) of Royal Bank of Canada. Used under licence. © 2023 RBC Dominion Securities Inc. All rights reserved.
