Portfolio Analysis Tool Information

Advisor Partners seeks to diversify clients’ portfolios to an index-like portfolio with the goal of minimizing taxes. A trade-off exists between tax implications and reducing risk (tracking error).

The Portfolio Analysis Tool (PAT) gives clients the ability to see the impact different rebalance scenarios have on their portfolios. For a general transition analysis, PAT runs the following scenarios (click below):

A trade-off exists between tax implications and reducing risk (tracking error). The Portfolio Analysis Tool (PAT) gives clients the ability to see the impact different rebalance scenarios have on their portfolios. For a general transition analysis, PAT runs the following scenarios:


- Loss-only:     The solution will only sell securities that have an unrealized loss. This could result in a high tracking error portfolio.


- Tax neutral:     The solution will sell securities at both gains and losses so long as the net capital gains realized is a loss. This could result in a lower tracking error portfolio.


- Gains budget:     This solution will securities at both gains and losses so long as the net capital gains realized is no more than the gains budget provided by the client. This could results in the lowest tracking error portfolio amongst all scenarios.

For cash raises, any gains budget provided is ignored. PAT runs the following scenarios :


- Lower TE solution:     The solution raises cash by selling securities that are either in overweight sectors and/or have weights greater than their representative weight in the underlying benchmark. This reduces tracking but could result in a higher tax bill.


- Higher TE solution:     The solution raises cash by selling securities that have higher cost basis to minimize the tax burden. This could increase the tracking error of the portfolio.



If you would like to see additional scenarios or would like to incorporate specific customizations/constraints into the analysis, please contact the below and we will be happy to assist you.

clientservices@advisorpartners.com