Issue link: https://info.seic.com/i/1540115
5 Maximize control with an annual capital gains budget. A capital gains budget sets a target for net realized gains each tax year, aligning portfolio management decisions with broader financial and tax objectives. The budget is applied annually as a net framework that seeks to reduce or defer gain realization and may help offset gains through tax-loss harvesting. Throughout the year, investment trading decisions—whether related to asset allocation, liquidity, or rebalancing—are evaluated in the context of the client's capital gains budget. The capital gains budget serves as a strategic constraint, guiding decisions without being rigid. Providing robust assessment through a tax transition analysis Investors with substantial unrealized gains may hesitate to diversify due to tax concerns, leaving them feeling stuck with their portfolios. Tax transition analysis offers valuable insights by presenting multiple scenarios to help investors assess the implications of alternative actions (Exhibit 2). This analysis helps guide the migration of concentrated, unmanaged, or other current portfolios into a customized investment strategy, such as an SMA, while managing tax impact. Two approaches designed to integrate elements of our robust tax management support the process to help you carefully craft an implementation plan LI G HT Offers a lower deviation from the target model, balancing net realized gains with target model overlap. S TA N DA R D Offers a higher tax sensitivity and potential for less realized gains but a higher deviation from the target model. Exhibit 2 Trasition summary and options Current portfolio Model overlap Light approach Standard approach Realized Gain/Loss $367,402 $72,017 ($34,826) Short-term $108,102 ($33,402) ($39,394) Long-term $259,300 $105,418 $4,568 Unrealized Gain/Loss $1,215,144 $847,652 $1,142,874 $1,249,784 Short-term $155,434 $47,301 $188,647 $194,673 Long-term $1,059,710 $800,351 $954,227 $1,055,111 Tracking error (vs model) 3.01% 0.02% 1.28% 2.16% Turnover 100% 55.84% 23.62% 13.48% Estimated tax cost $315,628 $105,819 $11,462 ($14,986) Potential tax savings $209,809 $304,166 $330,614 A CA PITA L G A I N S B U D G E T H E LP S YO U : • Proactively plan portfolio changes • Strategically harvest gains or losses • Minimize unexpected tax liabilities For illustrative purposes only