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Tax Loss Harvesting Guidelines

Listed below are the guidelines by which Symmetry Partners will monitor accounts and harvest losses in securities to offset capital gains tax liability. It is understood that any parameter described herein is a target and not a certainty.

  1. If a client would like to harvest unrealized gains or losses the standing Tax Harvesting Gain Loss Form must be on file signed by the client and advisor. The account must be established with “Tax Lot Optimized” as the tax lot relief method. Open end mutual funds,  closed end mutual funds, and ETFs should be set to have their accounting methodology set to “Actual Cost”. 
  2. Symmetry will proactively monitor accounts with regularity to identify opportunities to harvest losses from securities held in the account, minimize short term gains, while maintaining the desired tracking error to the investment strategy. 
  3. Securities considered in scope for losses to be harvested from are mutual funds, ETFs, common stocks and ADRs. 
  4. Symmetry will perform a recurring analysis of the account to identify harvesting opportunities that meet certain thresholds defined by Symmetry Partners Research. An analysis of an account does not guarantee that losses or gains will be harvested. Symmetry Partners will maintain discretion and determine if trade execution is appropriate at the time of the analysis. Symmetry’s analysis takes into consideration the following criteria: 
    1. Client tax preferences
    2. Tracking error to the investment strategy
    3. Tax harvesting preference selected by the client (Light, Standard, Aggressive)
    4. Avoidance of violating wash sale rules. 
  5. Opportunities to harvest gains or losses must meet or exceed the minimum requirements set forth by Symmetry Partners below and will be at the discretion of Symmetry Partners execution.
    1. Tax lots with a loss greater than or equal to approximately 5% of the securities value
    2. Minimum trade value of approximately $50 in losses per security
    3. Execution of trade not in violation of standard wash sales rule. 
  6. Clients will have three options to choose from when establishing the harvesting preferences. 

    The three options are as follows: 

    Light: Loss harvesting occurs to a lesser extent while high emphasis is placed on tracking error. This option may be appropriate for clients who have expressed a preference for some degree of tax benefit from loss harvesting but have a lower tolerance for increases in tracking error. 
    Standard: Balances tax-loss harvesting with forecast tracking error. This option may be appropriate for clients who have expressed a preference for a moderate degree of loss harvesting and can tolerate larger increases in tracking error compared to the Light option. 
    Aggressive: Loss harvesting occurs to a greater extent while low emphasis is placed on tracking error. This option may be appropriate for clients who can tolerate larger increases in tracking error in exchange for better tax impact. For clients who have booked or expect to book significant capital gains in the current year, Aggressive Loss Harvesting may be appropriate, assuming a higher tolerance to tracking error.