Our top blog posts of 2023: a study on the tax efficiency of direct indexes vs comparable ETFs, a press release covering an AUM milestone, our 2022 Estimated Taxes Saved or Deferred Report...and more.

Our top blog posts of 2023 included a study on the tax efficiency of direct indexes versus comparable ETFs, a press release covering an AUM milestone, our 2022 Estimated Taxes Saved or Deferred Report, and more. We’ve compiled them here.

1. Direct Indexes Are 3 to 5 Times More Tax Efficient Than ETFs

To generate estimates of the relative loss harvesting efficiency of direct indexes versus comparable ETFs, we created a simple model that compared the loss harvesting of a simulated portfolio of 100 stocks and a simulated ETF that contained the same 100 stocks. The result? Direct indexes are 3 to 5 times more tax efficient than comparable ETFs.

2. Smartleaf Announces GPT-5 Integration

On April 1st, 2023, Smartleaf was thrilled to announce that we replaced our core trade analytics and user interface in their entirety with Generative Pre-trained Transformer 5 (GPT-5)…

3. Smartleaf Surpasses $50 Billion in AUM, Cementing Its Role as Direct Indexing and Rebalancing Leader

In Q4 of 2023, Smartleaf announced its total assets under management have exceeded $50 billion. This milestone not only signifies the maturity of Smartleaf’s cutting-edge technology but also reflects the growing demand for its services, which streamline personalization and tax optimization for both advisors and investors.

Each year, Smartleaf reports the total amount in taxes saved or deferred by the clients of Smartleaf users. In 2022, the average client of Smartleaf users saved or deferred taxes equal to 3.07% of the value of assets that were actively tax-managed. The total dollar amount came out to $511,468,066. 

An earlier version of this post originally published in December, 2022. We generated estimates of the relative value of year-round vs year-end loss harvesting using modeled security movement as a lognormal random walk, with a set expected return and a standard deviation. The results indicated that year-round tax loss harvesting is 1.5X to 2X as effective as year-end loss harvesting. .

Bob Veres of Inside Information described Smartleaf in his summary of the 2023 T3 Conference, covering Smartleaf President Jerry Michael’s presentations on delivering portfolio personalization and tax optimization at scale, noting that Smartleaf made a splash at the event.

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