Manju Boraiah, Head of Systematic Fixed Income and Co-Head of Custom SMA for Allspring, joined Julie Cooling, Founder and CEO of RIA Channel, to discuss how the macro environment and tax considerations are influencing portfolio positioning.
The systematic team builds active and passive fixed-income portfolios for institutional clients. The SMA team builds custom tax-efficient portfolios for retail clients. Boraiah sees growing demand for tax-efficient investing across the entire portfolio. Tax efficiency needs to be built into investment strategies, whether they are actively or passively managed. Investors are seeking tax efficiency in fixed-income strategies, where Allspring offers active and laddered strategies. The multi-asset SMA platform manages tax-efficient portfolios across fixed income and equity portfolios.
Boraiah notes that economic growth is slowing while inflation remains sticky and persistent. Despite three rate cuts from the Federal Reserve, fixed-income investors remain cautious amid the possibility of stagflation. Investors are seeking stable income across the portfolio and have been upgrading the quality of their fixed-income holdings.
Direct indexing is useful for investors seeking exposure to equity beta, with the tax-loss harvesting capabilities being especially beneficial for investors with concentrated stock positions or an anticipating liquidity event in the coming years.
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