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Lumida Wealth Management LLC 2026. All rights reserved.
Lumida's Tax Shield
Tax-Aware Long/Short SMAs
An ideal solution for clients with:
- Significant expected capital gains
- An upcoming liquidity event, such as a founder's exit
- Concentrated stock or property exposure at low basis
Seek to Reduce Capital Gains
Lumida's strategy is designed to deliver the return on a US equity benchmark, plus a factor return, while generating substantial tax-loss harvests. These losses can be accumulated as capital loss carryforwards that then offset capital gains.
The Separately Managed Account (SMA) is custodied at Fidelity. The SMA structure allows you to maintain daily control, liquidity, and transparency.
This strategy focuses on realizing tax losses to offset capital gains, allowing investors to retain market exposure and defer taxes effectively. It is well suited to managing concentrated positions or new liquidity.
Lumida's Tax Shield SMAs use a quantitative approach to systematically identify loss-harvesting opportunities while holding long positions in stocks expected to outperform and shorting those likely to underperform.
This strategy provides equity returns, a factor return, and tax-loss carryforwards so you can compound your wealth while creating a tax shield.
The Separately Managed Account (SMA) is custodied at Fidelity. The SMA structure allows you to maintain daily control, liquidity, and transparency.
This strategy focuses on realizing tax losses to offset capital gains, allowing investors to retain market exposure and defer taxes effectively. It is well suited to managing concentrated positions or new liquidity.
Lumida's Tax Shield SMAs use a quantitative approach to systematically identify loss-harvesting opportunities while holding long positions in stocks expected to outperform and shorting those likely to underperform.
This strategy provides equity returns, a factor return, and tax-loss carryforwards so you can compound your wealth while creating a tax shield.
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Lumida's Tax Shield: Tax-Aware Long/Short SMAs
See how our strategy can help you achieve your financial goals while minimizing taxes. Download the write-up to find out more.
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Frequently Asked Questions
What will the strategy own?
The strategy is benchmarked against indices like the Russell 3000 and MSCI World, offering broad market exposure to US or global equities, while actively managing long and short positions.
How many positions will the strategy hold?
Typically, Lumida's Tax Shield SMAs hold hundreds of positions across a wide range of sectors and market capitalizations. This high level of diversification helps balance risk while maximizing tax-loss harvesting opportunities.
How does the strategy work?
The strategy leverages a quantitative factor model, a sophisticated data-driven approach that evaluates stocks based on attributes like value, quality, momentum, and sentiment. These factors are combined to build a portfolio that seeks to outperform traditional long-only strategies while generating consistent tax benefits.
Why is shorting necessary, and how does it enable tax-loss harvesting?
Shorting allows us to benefit from declining stocks, creating additional opportunities to realize tax losses. This approach not only enhances potential tax savings but also provides an extra source of return by capitalizing on overvalued stocks and market inefficiencies.