CLS’s Master Manager Tax Management strategies emphasize portfolio performance, followed by diligence to tax liability. These portfolios are diversified, highly customized, and actively managed, and CLS portfolio managers assess the potential tax consequences of each trade prior to executing. In addition to individual stocks and bonds, each portfolio we manage includes ETFs, as holding an ETF in a taxable account will generally result in fewer tax liabilities than holding a similarly structured mutual fund. We also include tax-free bonds wherever possible to avoid federal – and sometimes state – taxes from bond income.
Master Manager Tax Management Strategy: Tax-Managed ETFs
Strategy seeks long-term growth of assets and sensitivity to taxes. The portfolio is fully allocated to tax-efficient ETFs, which also provide lower cost, transparency, and stable market and risk exposure.
Master Manager Strategy: ETFs & Tax-Managed Stocks
Strategy seeks to grow the portfolio while remaining conscientious of tax implications through allocation to a combination of tax-efficient ETFs and individual stocks.
Master Manager Tax Management Strategy: ETFs & Municipal Bonds
Strategy seeks long-term growth of assets and sensitivity to taxes and fees. The portfolio is allocated to a combination of tax-efficient ETFs and individual municipal bonds.
Master Manager Strategy: ETFs, Tax-Managed Stocks & Municipal Bonds
Strategy seeks tax-efficient growth of the portfolio through allocation to a combination of tax-efficient ETFs, individual stocks, and individual municipal bonds.
Selecting Individual Stocks
By investing in individual stocks, CLS has the opportunity to harvest losses and maintain low capital gains.
We focus on investing in market leaders that operate efficiently in their core business, and on emphasizing stocks with worthwhile appreciation potential. Portfolios will generally include stocks with a wide variety of prices and price/earning ratios, as well as a mix of those that pay dividends and those that do not.
Selecting Individual Bonds
Generally, bond portfolios will invest in municipal bonds, which are those issued by U.S. states, municipalities, or counties to finance capital expenditures.
Municipal bonds are appealing because they often represent investments in state and local government projects that have an impact on daily life, including construction or improvement of schools, highways, hospitals, housing, and other important public projects. Potential issuers include: cities, counties, redevelopment agencies, special- purpose districts, school districts, public utility districts, publicly-owned airports and seaports, and any other governmental entity below the state level. Municipal bonds may be general obligations of the issuer or secured by specified revenues.
Municipal bonds help mitigate potentially negative tax consequences, since the interest income that bondholders earn is often exempt from both federal income tax and the income tax of the state in which they are issued. Also, unlike new issue securities that are brought to market with price restrictions until the deal is sold, municipal bonds are free to trade at any time once the investor purchases them.