Advisor Flipbooks

©2023 SEI 42 Disclosures & Important Information For Financial Intermediary Use Only. Not for Public Distribution. After-Tax Returns: When calculating after-tax returns, Parametric applies the client's individual tax rate, if provided by the client. Otherwise, Parametric applies the highest U.S. federal tax rates. The client's tax rate may include federal and state income taxes or other custom rates. For short-term gains, the highest U.S. federal marginal income tax rate is 37% plus 3.8% net investment income tax, for a combined rate of 40.8%. For long-term gains, the highest U.S. capital gains tax rate is 20% plus 3.8% net investment income tax, for a combined rate of 23.8%. These assumed tax rates are applied to both net realized gains and losses in the portfolio. Investors' actual tax rates, the presence of current or future capital loss carryforwards, and other investor tax circumstances will cause an investor's actual after-tax performance to be over or under Parametric's estimates presented here. In periods when net realized losses exceed net realized gains, applying the highest tax rates to their calculations illustrates the highest after-tax return that could be expected of the portfolio, and assumes the maximum potential tax benefit was derived. Actual client after-tax returns will vary. The after-tax performance reported here is an estimate. In particular, it has been assumed that the investor has, or will have sufficient capital gains from sources outside of this portfolio to fully offset any net capital losses realized, and any resulting tax benefit has been included in Parametric's computation of after-tax performance. Target after-tax returns are simulated for each client portfolio using client-specific, after-tax target portfolios. Performance of the after-tax target is simulated using the same inception date, cash flows, cost basis, and tax rates as the client portfolio. The after-tax target's capital gain realization rate is based on the weighted average turnover rate of the combination of models allocated to by the client. The dividend income is estimated using the weighted average dividend return of the combination of models allocated to by the client during the period. Estimated Tax Savings: The Estimated Tax Savings is an estimate of taxes saved (or incurred) in all accounts invested in the SEI Tax-Managed ETF Strategies that were open for the full year relative to a hypothetical alternative of management using a clone rebalancing strategy (one that rebalances to the target daily, with no transaction costs). Estimated Tax Savings are calculated as the sum of Gains Not Realized, Short-term Gains Deferred to Long-term and Net Loss Harvesting and are an approximation only. In particular, the Estimated Tax Savings do not account for potential follow-on tax consequences of tax decisions, which may cause an overestimate of the value of loss harvesting. For example, loss harvesting lowers the average cost basis of a portfolio, which can increase future realized gains. In addition, if the replacement security appreciates and is sold within one year, the gain will be taxed at short-term capital gains rates. With underweighted positions, the Estimated Tax Savings can fail to adjust for realized losses or unrealized gains that would have occurred even without tax management. For example, suppose a position is loss harvested and, coincidentally, the security is removed from the target the next day. In this case, the position would have been sold at a loss anyway, even without tax management. The methodology for calculating Estimated Tax Savings does not uncredit the previous loss harvesting event, resulting in an overestimate of the value of loss harvesting. The Estimated Tax Savings do not include the value of reinvesting saved taxes. This results in an underestimate of the value of both gains deferral and loss harvesting. Sale values are based on end-of-day pricing, not actual execution price. Estimated Tax Savings are calculated by the Smartleaf portfolio management system, based solely on trades through that system. It does not include the effect of trades exported from the system that were not executed or trades that did not come through the Smartleaf system. Please note that the number of shares above/below target is calculated for each position relative to its weight in the target. In the case of loss harvesting and sales below target at a gain, only the portion of the sale that puts the position below target weight counts towards/against the Estimated Tax Savings. For deferred gains and lots that go from short-to long-term status, only the portion of the position held above target weight counts towards the Estimated Tax Savings. The Estimated Tax Savings do not account for any differences in the pre-tax returns of the portfolios compared to a hypothetical non-tax managed alternative.

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