Issue link: https://resources.envestnet.com/i/1537368
Envestnet PMC uses a sophisticated tax-optimization engine that measures and considers the tax costs of potential security sales in making portfolio construction decisions. A portion of the taxes in client portfolios are in the form of realized short-term capital gains, and our tax-management process seeks to minimize and, when possible, eliminate net short-term capital gains realization. By modeling the tax impact of trades and considering realized gains and losses, Envestnet PMC seeks to improve the client's after-tax returns. The Process As the overlay portfolio manager, Envestnet PMC is responsible for coordinating the investment activity within an account. The individual managers who make up the client's account act as subadvisors who provide their model portfolios to Envestnet PMC. When a subadvisor recommends a change to its model, Envestnet PMC, as overlay manager: • Weighs the impact of transactions on taxes against the risk of not complying with the manager's recommendation; • Maintains responsibility for the account administration and coordinates all trades; and, • May elect to prevent the transaction, or look to make additional changes to balance the recommended change, if the individual client's tax situation dictates the trades not occur. Risk-Based Overlay Envestnet PMC's risk-based overlay portfolio management allows advisors to combine multiple investment strategies and vehicles into one account to meet the specific needs of an individual client. This approach incorporates strict adherence to each individual investment manager's strategy within the account and centralizes the discretionary authority, providing a single, aggregate investment solution. Our patented portfolio optimization process (US PTO # 7,668,773) enables balancing the investment decisions of individual managers with specific client customization requests (i.e., tax and security-specific considerations) while maintaining the overall risk profile of an account. Small Cap Growth Fund Large Cap Value Model Portfolio International ETF Single Account Overlay Portfolio Manager SMA ETF Mutual Fund Unified Managed Accounts 3 FOR HOME OFFICE AND ADVISOR USE ONLY. NOT FOR USE WITH THE INVESTING PUBLIC. 20250609-4562819 █████████████████ Ì2000096MIHÎ