9 SEI Managed Account Solutions
Tax-aware trade coordination
The example below highlights the opportunity for saving on taxes using an overlay portfolio
manager. In most managed accounts, the managers trading on your behalf cannot see what the
others are doing, which can result in you paying capital gains unnecessarily.
The overlay portfolio manager, who has a bird's-eye view of all manager activities, helps ensure
that stocks with higher cost basis are sold first, helping you to defer or reduce taxes.
Portfolio includes 200 shares of XYZ at $100/share
Manager A: 100 shares with $50 cost basis
Manager B: 100 shares with $95 cost basis
Typical managed account
Unified managed
account (UMA)
Manager A decides to sell XYZ
Result: Taxable event of $50/share
Manager A decides to sell XYZ
Overlay manager arranges for sale of
Manager B's shares at higher cost basis
Result: Taxable event of $5/share
Portfolio overlay manager lowers the tax obligation of the sale by 90%
For illustrative purposes only.
