As high-net-worth individuals and families seek greater control over investment outcomes, integrating tax-aware strategies into portfolio construction is increasingly important. We recently hosted a fireside chat featuring Hoon Kim, Founder and Chief Investment Officer of Quantinno, which was moderated by IEQ Managing Director, Jimmy Morris.
What Is Long/Short Tax Loss Harvesting?
Long/short tax loss harvesting is a strategy that combines long and short equity positions to increase the number of opportunities to realize capital losses. In long-only portfolios, tax loss harvesting depends on identifying securities that have declined in value. During rising or sustained bull markets, these opportunities often diminish.
By adding short positions, investors may be able to generate losses in both upward and downward markets. These realized losses can help offset gains elsewhere in the portfolio, potentially improving after-tax outcomes and making tax alpha more consistent across market cycles.
The Future of Integrated Tax and Investment Planning
Kim noted that portfolio tax management is increasingly becoming an integral part of investment design, not just a year-end exercise. Embedding tax awareness into portfolio construction can potentially allow advisors to more effectively manage outcomes related to taxes, diversification, and long-term wealth preservation.
Why Tax-Aware Strategies Matter for High-Net-Worth Investors
The evolution of tax-aware investing reflects a broader shift in how advisors serve taxable clients. With tools like long/short tax loss harvesting available through separately managed accounts, advisors have more ways to design portfolios that reflect each client’s financial structure, tax situation, and legacy planning goals.
At IEQ Capital, we continue to support conversations that explore the connection between tax strategy, investment management, and wealth preservation. Events like this fireside chat with Quantinno help highlight the importance of aligning tax-aware strategies with client-specific outcomes.
The views and opinions expressed in this article are those of Hoon Kim, Founder and CIO of Quantinno Capital Management LP, and may not necessarily reflect the views of IEQ Capital, LLC (“IEQ”). This article is intended for informational purposes only and does not constitute investment, tax, legal, or accounting advice. The content should not be construed as a recommendation or endorsement of any particular strategy or product. Any references to potential outcomes are illustrative in nature and do not guarantee future performance or results. Investors should consult with their own legal, tax, and financial advisors before implementing any investment strategy. Quantinno Capital Management LP and IEQ Capital LLC are separate and unaffiliated entities.
Investing involves risk, including the possible loss of principal. Past performance is not indicative of future results. This event may include discussion of investment strategies that may not be appropriate for all investors. Please consult your financial and tax advisors before making investment decisions.
For overlay, core, and exchange:funding collateral must be marginable securities. Commonly seen un-marginable securities include Crypto ETFs, Levered ETFs, and Commodity ETFs.
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