Parametric

While the tax conversation may seem to end on April 15, we think tax season could be the time to start a better approach to tax planning—a natural moment to reflect on how investments are managed, looking for ways to help reduce tax drag and increase the potential for after-tax performance going forward.

If you’re not sure what direct indexing means, you’re not alone. Even after the recent growth, direct indexing remains relatively unknown. As our risk review team never fails to remind us, you can’t invest directly in an index. So what exactly is direct indexing?

The Qualified Opportunity Zone (QOZ) program is entering a pivotal transition period, with some legacy incentives expiring this year and a redesigned framework set to take effect next year.

As investor expectations evolve, and tax awareness becomes more central to portfolio construction, active tax management has emerged as a defining feature of sophisticated investment strategies. Across both equities and fixed income, disciplined processes may help investors retain more of what they earn.

Corporate pension funding continues to improve. Market moves over the last five years, both in yields and equity returns, have corporate pension plans at funding levels not seen since before the Tech Bubble.

In our view, 2025 reinforced a familiar conclusion that tax management remains as relevant as ever, even though tax policy may no longer be a moving target.

Coming into 2026, investors face a landscape shaped by persistent inflation, evolving US monetary policy and global uncertainty. At Parametric, our systematic and customized approach is designed to help clients navigate these complexities while preserving after-tax returns.

Equity markets have delivered strong returns in recent years, leaving many investors with substantial unrealized gains across their portfolios. Let’s consider how a tax-managed long-short strategy could be a powerful tool in the pursuit of tax efficiency—for the right investor.

Another strong year for US equities in 2025 reminds us that tax loss harvesting has the potential to contribute substantial value to direct indexing portfolios—even during bull markets.

Here we consider an area that is less explored: the ability to implement systematic strategies like trend following within an overlay program. We see a natural opportunity for integrating overlay and trend strategies, given that both have similar architecture as predominantly rules-based derivatives strategies.

Portfolio customization and tax management were once reserved for a financial advisor’s wealthiest clients. That era is ending. Tax efficiency and customization are fast becoming core components of wealth management beyond the top income tiers.

What were the key takeaways from last month’s numbers? Our corporate bond specialists look back at the market’s performance and provide incisive commentary to help you make sense of what drove the market—and what may be on the horizon for fixed income investors.

We expect the US economy to remain resilient in 2026, providing a constructive backdrop for risk assets, as well as corporate and municipal credit. But the mix of macro uncertainty, policy division and elevated deficits could widen the range of potential outcomes and increase rate volatility—especially as the Federal Reserve approaches the neutral rate.

Energy commodities enter 2026 at an interesting crossroads. On one hand, oil and gas markets have abundant supply and somewhat softer pricing. On the other hand, the ongoing energy transition is accelerating investment in new energy sources.

In today’s complex financial landscape, taxable US institutions face unique challenges in balancing their investment objectives with tax efficiency. They simply cannot afford to overlook the impact of taxes on their portfolios.

As wealth continues to grow along with soaring equity markets, and technology enables customization and choices once reserved for a select few investors, financial advisors are tasked with constantly evolving to maintain their value position.

As the year winds down, many investors focus on year-end charitable giving and tax planning. Finding a charity and donating money is the easy part. Taking slightly different approaches to gifting can yield dramatically different results from a tax perspective.

With an economy exceeding $1.1 trillion and a proven record of conservative budgeting, New York City stands apart as both a global capital and a dependable municipal credit. Let’s look at 10 reasons why we believe NYC’s fiscal health and credit strength may continue.

Think all commodity indexes are created equal? Index design choices made behind the scenes can lead to wildly different—and sometimes disappointing—investment outcomes. Here’s why we think a diversified approach may be a better bet.

The interest rate volatility over the last three years has many investors reaching for bond ladders. We think there’s a best number of bonds to navigate the market and, coincidentally, it has something in common with a sci-fi classic.

If an investor has ever asked “Can you help me pay less in taxes?” then you’re not alone.

As our title suggests, September saw positive performance in fixed income markets but a great and overdue catch-up for municipal bonds.

Separately managed accounts, paired with systematic tax management, had the power to capture losses in the third quarter—even when the market was up.

Higher yields earlier in the year opened a window for meaningful tax loss harvesting. Investors who acted captured valuable tax savings, while those who waited saw opportunities diminish as yields retraced lower through the end of the third quarter.

Taxes can have a major impact on the long-term growth of a portfolio. Find out how continuous, thoughtful tax management can help investors maximize their wealth.

As regional misalignments risk significant performance deviations amid trade uncertainty, let’s look at how overlay management can potentially help to guide global equity portfolios.

Customization can significantly impact after-tax yield. Explore powerful tools for tailoring investment strategies to meet unique client objectives.

Discover how the One Big Beautiful Bill Act (OBBBA) may impact the municipal bond market, and find out which institutions are better positioned to overcome the sweeping policy reforms.

As demand for personalized investing strategies has increased, direct indexing has become one of the fastest-growing types of separately managed accounts (SMAs).

Streamlining government spending is a worthy cause in the effort to establish a more sustainable budget. Let’s review the progress of the Department of Government Efficiency (DOGE) and outline some areas for improvement.

For taxable investors, an appreciating portfolio can be a mixed blessing. But regular loss harvesting isn’t the only way to reduce your portfolio’s tax bill, especially as its value rises. We share four important tax management techniques for the future.

Economic resilience allowed the Fed to remain in wait-and-see mode in July, but July’s non-farm payroll report may cloud the horizon.

While the One Big Beautiful Bill Act (OBBBA) has something for each constituency in President Trump’s political coalition, we think it could be a squandered opportunity to alter the unsustainable trajectory of federal debt.

The ICE BofA Fixed Rate Preferred Index returned 1.45% in July, bringing YTD gains to 2.47%. The $25 par ICE BofA Core Plus Fixed Rate Preferred Securities Index rebounded with a 2.77% return, while ETF inflows exceeded $150 million.

The popularity of direct indexing has grown significantly since the pandemic, with no signs of easing.

Fixed income investors often think of changes in US Treasury rates as the tide that lifts or lowers all other domestic bond yields.

In a series of blogs, our experts look back on an exceptionally volatile first half, then offer their insights on what we might expect to see for the balance of the year. Let’s start with a high-level overview.

Congressional Republicans delivered the much anticipated One Big, Beautiful Bill Act (OBBBA) to President Trump’s desk just in time for a symbolic July 4 signing.

June was a month of stabilization and subtle strength for preferreds.

For many years, the pension plan has often been a drag on a corporation’s financial positions. Now that’s generally no longer the case, and it’s time to consider what’s next.

The second quarter’s rapid recovery from April’s market volatility reminds us how powerful a systematic rules-based approach to tax management can be.

As we reach the midpoint of 2025, we reflect on the notably volatile trajectory of bond yields so far this year, considering the potential opportunity for tax-aware fixed income investors to harvest losses.

We expect tariff policy to remain a key part of the narrative pushed by the administration.

We began the year optimistic that an environment of slowing growth, disinflation and easier monetary policy would be favorable for fixed income markets. Now at midyear, we maintain that view, while acknowledging that policy uncertainty and geopolitical risks may likely result in continued volatility.

How do direct indexing ideas fit into a fixed income portfolio? These two powerful strategies make one compelling combination with potential tax and risk management opportunities.

At Parametric, our years of experience have taught us that markets can swing up and down quickly and without warning. Since no one can time these swings, we believe it's imperative to seek both loss harvesting and benchmark tracking simultaneously.

Over many years of educating investors about direct indexing, we have noticed a common misunderstanding—conflating the economic value of harvested losses with the investment return on the performance statement.

The Endowment Tax was introduced during the first Trump administration as part of the 2017 Tax Cuts and Jobs Act (TCJA).

Direct indexing has been in the news a lot more in recent years. Larger industry players have strategically acquired a number of providers—including Parametric. And many new entrants have entered the space, looking to build on its success.

The uncertainty around US tariff policy has significantly increased US equity volatility.

Sharp losses in investment grade (IG) corporate bonds this month have reminded us of the potential advantages of rules-based fixed income ladders.

Downgrades and defaults can detract from corporate bond portfolio performance. Let’s look at how applying fundamental credit research may help reduce these risks.

Another period of heightened volatility in the markets reminds us why tax management can be such an essential part of fixed income investing.

Bonds have gained as investors sought shelter amid growing fears around a tariff-driven global economic slowdown.

Investors face new challenges as their wealth grows. So it’s a good thing that direct indexing is designed to fit their allocations just the way they are.

For taxable investors with sizable gains in their brokerage accounts, the decision when to realize that capital gain is intensely personal—depending of course on individual circumstances, while also factoring in market return expectations and the prevailing tax structure.

Customization is an integral part of direct indexing. The technology behind it can make or break the experience for clients and advisors alike. We dive into the features and functions that make the best tools.

Parametric’s tax optimized ladders (TOL) solution may help to enhance after-tax yield by seeking to optimize the allocation between tax-exempt and taxable bonds, based on an investor’s own tax rate and the relative value between sectors.

The municipal bond tax exemption is back in focus. We believe the threat to infrastructure investment outweighs the modest revenue benefits, which could keep the risk of elimination or significant curtailment low.

The managed account industry has seen tremendous growth and client adoption, with assets increasing by 28% over the last year and 50% over the past two years.

How will potential trends in inflation, the US dollar and supply deficits across many raw material markets affect the environment for investing in commodities?

Investors may be at a crossroad in early 2025. US equities have recovered from the 2022 bear market with two exceptional years of +25% returns.

US equity markets rallied just enough to round out 2024 with all four quarters posting positive returns. The S&P 500® Index finished the fourth quarter up 2.41%, bringing the year’s total return to 25.02%.

Reflecting ongoing uncertainty around inflation and the trajectory of monetary policy, yield volatility posed challenges in 2024. Yet it also highlighted the importance of tax-efficient strategies like loss harvesting in fixed income portfolios.

Direct indexing has been around for more than 30 years, yet many people still don’t know what it is or how it continues to grow and evolve.

As investors continue to step out of cash and potentially rebalance out of equities following their strong performance, we expect bonds to play a larger role in diversified portfolios next year.

In an actively managed portfolio, there’s no way to escape capital gains taxes altogether. But understanding the importance of tax efficiency is crucial to long-term success for investors and advisors.

In an equity market that has mostly moved straight up this year, the logical question is, how have we been realizing losses? Our analysis of potential tax benefit1 may provide the answer.

When it comes to personalized investment strategies, multiple perspectives come into play: the client, the provider and the advisor.

A year-round focus on taxes can unlock value for investors in higher brackets—and it can help advisors prove their own value.

As the year winds down, many investors focus on year-end charitable giving and tax planning. Finding a charity and donating money is the easy part. Taking slightly different approaches to gifting can yield dramatically different results from a tax perspective.

Volatile interest rates have spurred investment capital into motion. Clients often ask where they should allocate on the yield curve.

Commodity returns are hard to predict, yet all commodities have something in common—prices that tend to return to their long-run average, a characteristic described as mean reversion. For investors, this behavior could offer an exciting opportunity to improve long-term performance potential.

Taxes can have a major impact on the long-term growth of a portfolio. Find out how continuous, thoughtful tax management can help investors maximize their wealth.

Here we dispel three common myths about elections and investments, demonstrating why we think sticking to a long-term investment plan might be a better path to success than trying to predict political cycles.

We often write about the opportunity for fixed income investors to lock in relatively attractive long-term rates. And we would argue that investment consultants and financial advisors have no more important charge than to convince their clients to take advantage of this while they still can.

Elevated budget deficits imply growing US Treasury issuance. Receding demand from central banks could leave more price-sensitive buyers to pick up the slack. Who are the buyers of US government debt, and how is the market responding? In part two of our series, let’s examine Treasury market supply and demand.

Active management can lead to high portfolio turnover and a higher tax bill. Wealth managers might feel that an active strategy could be too inefficient for clients who are sensitive to taxes. Find out how implementing a core-satellite portfolio with a direct indexing core may improve tax efficiency.

For taxable investors, an appreciating portfolio can be a mixed blessing. But regular loss harvesting isn’t the only way to reduce your portfolio’s tax bill, especially as its value rises. We share some important tax-management techniques for the future.

Many investors hold a concentrated stock position that represents a large percentage—typically 10% to 20%—of their overall portfolio value. Let’s review the risks of concentrated positions and then survey some of the possible solutions.

Ongoing budget deficits linger amid the post-COVID economic recovery. While markets appear unconcerned now, the accumulation of debt may exhaust investor patience. Anxiety about the sustainability of the nation’s debt could escalate with the upcoming elections in November. In part one of our series, let’s look at fiscal policy and Treasury debt.

Market expectations for Federal Reserve rate cuts in 2024 have shifted dramatically, from six cuts expected at the start of the year, to barely one or two at this writing. Here’s why we think the US economy’s resilience and the year-to-date increase in yields may prolong an attractive opportunity in fixed income.

As we move into the second half of 2024, let’s take a look at a familiar market dynamic that’s often misunderstood in commodity investing: Current inventory levels may be much tighter than futures curves are signaling.

Over the past 18 months, investment grade (IG) corporate credit spreads have narrowed considerably in response to solid fundamentals and a strong economy. Given the tight spread levels, should investors reconsider the attractiveness of owning corporate bonds and instead buy Treasury securities?

Recent challenges from higher rates and banking turmoil are well known to investors in preferred securities, but the performance of this asset class relative to other alternatives in fixed income may not be. Here’s why we think preferreds continue to offer attractive total return potential and a tax-advantaged income stream.

If you’re not sure what direct indexing means, you’re not alone. Even after the recent growth, direct indexing remains relatively unknown. As our compliance team never fails to remind us, you can’t invest directly in an index. So what exactly is direct indexing?

What do people really mean when they talk about impact investing? Typically they’re referring to investments made with the intention of generating measurable social or environmental benefits in addition to financial return.

For many investors and financial advisors, December is the big month for tax-loss harvesting. But there can be negative consequences because of the wash-sales rules. A more effective way to manage taxes is harvesting losses all year long.