Green Harvest Asset Management’s Core Index Plus U.S. Equity strategy offers investors access to a managed portfolio of passive Exchange Traded Funds (ETFs) designed to provide domestic equity exposure closely aligned with the S&P 500® Index. This strategy employs Green Harvest’s advanced SmartCapture discipline, which is an active, proprietary process designed to capture tax benefits with a focus on minimization of tracking error. This tax-beneficial strategy seeks to minimize or reduce taxes by capturing capital losses that may be used to offset capital gains which may improve after-tax performance.
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Composite Performance as of 12/31/20
|3 Month||1 Year||3 year*||Inception*|
|Strategy (gross of fees)||14.88%||19.42%||13.885%||15.15%|
|Strategy (net of fees)||14.76%||18.94%||13.42%||14.69%|
|Strategy (gross of fees)||14.79%||28.36%||17.63%||18.24%|
|Strategy (net of fees)||14.58%||27.85%||17.16%||17.77%|
|Strategy (Gross) - Benchmark||2.81%||10.67%||4.17%||3.60%|
|Strategy (Net) - Benchmark||2.69%||10.16%||3.70%||3.12%|
|Tax Alpha** (Gross)||0.08%||9.65%||4.47%||3.82%|
|Tax Alpha** (Net)||-0.04%||9.13%||4.00%||3.35%|
**Tax Alpha equals net after-tax excess return minus pre-tax excess return, i.e. the strategy’s After-Tax return vs. After-Tax benchmark minus the strategy’s Pre-Tax return vs. Pre-Tax benchmark.
Growth of $100 (as of 12/31/20)
Initial Anchor Holdings (New Portfolio as of 12/31/20)
|XLK||Technology Select Sector SPDR®||27.6|
|XLV||Health Care Select Sector SPDR®||13.5
|XLY||Consumer Discretionary Select Sector SPDR®||12.7|
|XLC||Communication Services Select Sector SPDR®||10.8|
|XLF||Financial Select Sector SPDR®||10.4|
|XLI||Industrial Select Sector SPDR®||8.4|
|XLP||Consumer Staples Select SPDR®||6.5|
|XLU||Utilities Select Sector SPDR®||2.8|
|XLB||Materials Select SPDR®||2.6|
|XLRE||Real Estate Select Sector SPDR®||2.4|
|XLE||Energy Select Sector SPDR®||2.3|
Performance quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, so you may have a gain or loss when the portfolio is liquidated. Current performance may be higher or lower than that quoted. Performance of an index is not illustrative of any particular investment and does not include the impact of advisory fees. It is not possible to invest directly in an index.
GHAM invests client portfolios in ETFs that invest in equity securities. Clients will be subject to the risks associated with equity securities, which include the rapid decline of market values due to general market conditions or company-specific factors. To the extent that a particular sector ETF is a significant portion of the portfolio, factors impacting that sector could cause the portfolio’s value to fluctuate more widely than a more diversified portfolio. The S&P 500 index is currently significantly weighted to Technology companies, so the performance of client portfolios will be more impacted by the performance of Technology companies than other types of companies. Technology companies typically face intense competition and risk of products becoming obsolete, factors that can contribute to more volatile performance than other types of companies.
The strategy seeks to provide exposure aligned with the benchmark while generating capital losses that may be used to offset taxable gains. GHAM does not seek to outperform the benchmark and thus, client portfolios may underperform other forms of active management.
GHAM does not provide tax advice. GHAM works with outside accounting firms and outside tax counsel that provide ongoing guidance and updates on all relevant tax law. Federal, state and local tax laws are subject to change. GHAM is not responsible for providing clients updates on any changes in tax laws, rules or statutes.
Composite performance calculations based on asset weighted average of all accounts in the strategy.
Composite performance calculations based on asset weighted average of all accounts in the strategy. The Strategy’s after-tax returns are calculated using actual before-tax returns that have been adjusted to estimate the benefits of using tax losses harvested to offset capital gains and reinvesting the resulting tax savings in the portfolio. For short-term and long-term capital gains realized in each client account, the after-tax return calculation uses the maximum federal tax rates applicable during the tax years shown, which were 40.8% and 23.8%, respectively. For dividend income received in each account, the estimate assumes the maximum federal tax rate of 40.8% applicable to ordinary income. The after-tax returns are hypothetical and may not reflect clients’ actual after-tax performance due to differences in tax rates and other circumstances. As examples, clients with lower applicable tax rates, capital loss carryforwards or no capital gains outside the portfolio are likely to experience lower levels of after-tax returns. In addition, the tax savings and reinvestment are assumed to occur in the tax year, although tax savings are not available during the tax year, and any reinvestment of such savings would occur following the tax year.
Green Harvest has approximated after-tax returns for the benchmark by increasing the Index’s monthly price returns by its dividend yield after applying a 32.3% tax rate, which assumes that half of dividends are taxed at the 23.8% rate applicable to qualified dividends and the other half at the 40.8% rate for ordinary income. Benchmark after-tax returns are provided for informational purposes only and are not intended as a measure of Green Harvest’s tax alpha compared to the benchmark. Significant differences between the calculation methodologies for Strategy and benchmark after-tax returns limit comparability between the returns. For example, the benchmark returns do not include the after-tax impact of capital gains, and different rates have been applied to dividend income.
Reasons to harvest capital losses, sources of capital gains and the suggestion that mutual funds distribute capital gains are for illustrative purposes only. The availability of tax alpha is highly dependent upon the initial date and time of investment as well as market direction and security volatility during the investment period. Tax loss harvesting outcomes may vary greatly for clients who invest on different days, weeks, months and all other time periods.
S&P 500® Index is a total return, float-adjusted market capitalization-weighted index of 500 common stocks chosen for market size, liquidity, and industry group representation to represent U.S. equity performance. Total return indexes include reinvestments of all dividends.
Initial Anchor Holdings are as of the date stated and are subject to change.
GHAM is solely responsible for the content of its website. The sponsor/broker dealer firm has not reviewed or verified the accuracy or completeness of its content and is not responsible for any statements included therein.
This material is not intended to recommend or offer any particular security. GHAM is not affiliated with any of the ETF sponsors represented in client portfolios.
All data and conclusions derived from data in this factsheet are unaudited and their reliability and accuracy is not guaranteed.
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