Our top blogs of 2024 by reader popularity: sleeves are bad, direct indexes make sense for all client sizes, Zoe Financial selects Smartleaf, our 2023 Estimated Taxes Saved or Deferred Report…and more.
The results are in! We've compiled your favorite Smartleaf blog posts from last year, ranked by popularity, all in one place. Our top blog posts of 2024 included arguments, comparisons, our annual taxes saved or deferred report, an exciting press announcement, and more.
1. Direct Indexes Are Great. Direct Index SMAs Are Bad
Direct indexes outperform ETFs on an after-tax expected basis. In turn, holistically-managed direct indexes outperform standalone Separately Managed Account (SMA) direct indexes. We explain “why” and “how” in this blog post.
2. Go Sleeveless or Go Home
We critique the use of sleeves in portfolio management, highlighting how they increase complexity and reduce risk-adjusted after-tax expected returns. And we explain why some firms still use them, despite their disadvantages.
3. Yes, Direct Indexes Make Sense for Investors Worth Less Than $1mm and Over $5m
Brent Sullivan, author of the excellent The Tax Alpha Insider posted a summary of what he’s hearing from advisors about direct indexes. What emerges is that many advisors believe that $1mm - $5m is the “sweet spot” for direct indexing, that below $1m “the juice isn’t worth the squeeze” and that above $5m “Direct indexing is a gimmick”. (Brent isn’t necessarily endorsing these positions – he’s just reporting)
We respectfully disagree with this take, however common, so we responded in this blog post. Our (apparently) contrarian view is that direct indexes make sense both for clients below $1mm and above $5m.
4. 2023 Taxes Saved or Deferred Report
Each year, Smartleaf reports the total amount of taxes saved or deferred by investors whose portfolios are tax managed through the Smartleaf system. In this post, we report that in 2023, the average investor whose portfolio was managed on Smartleaf saved or deferred taxes equal to 1.94% of tax-managed assets. The total dollar amount came out to $363,550,856.44. Stay tuned for our 2024 report, coming soon.
5. Zoe Financial selects Smartleaf for Personalized, Tax-Optimized Rebalancing
On May 9th, 2024, Smartleaf announced that its platform had been selected by Zoe Financial (Zoe). Smartleaf enables Zoe’s advisors to interactively provide their prospects and clients with personalized, tax-optimized rebalancing solutions, while freeing advisors from having to spend time rebalancing and trading portfolios – enabling the advisors to spend more time with clients.
6. Centralized vs. Advisor-Led Portfolio Management
Which is better, advisor-led or centralized rebalancing?
We argue that each maximizes customization in their own way. Advisor-led rebalancing maximizes trade-by-trade customization. Centralized rebalancing is more efficient, scalable and consistent. It also maximizes a firm’s ability to provide risk customization, social screens and tax optimization.
Thank you to our readers for another year of support and readership. We are grateful for you and your feedback. Click here to share your thoughts, including any topics you'd like to see us cover in 2025.
COMMENTS