Tax-smart robots can boost investors' returns

Direct indexing offers the potential to improve clients' after-tax returns through automated tax-loss harvesting.

Because investors directly own the individual securities in their direct indexing portfolios, you can harvest losses for them even in years when the index is up. You can use these losses to offset your clients' capital gains, and help them keep more of what their portfolios earn.

Our Tax Alpha Calculator provides a historical estimate of the after-tax alpha a hypothetical direct indexing account with daily scans for tax-loss harvesting opportunities could provide over a 10-year period.

The WSJ article that we are recommending is titled Tax-Smart Robots Can Boost Investors' Returns. We do not endorse any securities recommendations or analysis in other articles that appear on the page.

Vanguard Personalized Indexing Management, LLC ("Vanguard Personalized Indexing Management"), formerly Just Invest, LLC, an SEC-registered investment advisor, is an independently operated wholly-owned subsidiary of The Vanguard Group, Inc. ("Vanguard"). Vanguard Personalized Indexing is an asset management technology that has been developed and is offered solely by Vanguard Personalized Indexing Management.

The TLH Algorithm is designed to assess client accounts (typically on each business day that markets are open for trading, however, we may in our discretion for technical or market infrastructure reasons forgo an assessment on a given day) for tax-loss harvesting opportunities.