AMPLIFY YOUR VALUE

Limited time opportunity: use market volatility to lower - possibly even eliminate - a client's tax bill. Let us help you talk taxes with clients.

 

 

How tax efficient is your client's investment portfolio?

Rob Kuharic

Director, Tax Managed Solutions

The recent market volatility has been unnerving for many investors. But there may be a silver lining-especially for clients who scrutinize their tax bill and may have large accumulated capital gains in their portfolios.

Advisors seeking to amplify their value can capitalize on this moment by demonstrating to clients how much they may save when investing in tax-managed solutions.

We believe a good place to start is to let us prepare a complimentary tax analysis so you can see how tax-efficient your client's investment portfolio truly is. Request this now.

Taxes have a cost, it’s a big cost.
 

Which tax bill would you rather pay?
 

Your fund performance is down, so why are you paying taxes?

Turning lemons into lemonade:

 

How to convert the recent market volatility into a tax-managed opportunity

There is no denying that market volatility, especially volatility of the negative kind, can and does make clients as well as investment professionals nervous. Add to that a near constant 24-hour news flow that follows us almost everywhere (just consider that fact that we are attached to our little devices all day long) and many are left wondering, what do I do?

These numbers and stats I am about to share may be of little consolation, but it is important to put things into historical perspective:

  1. The Dow Jones Industrial Average (DJIA) finished the year 1919 at a level of 107. Today we are at north of 20,000 (21,201 at the time of my writing this). That is around a 200 times increase in the value of the Dow Index!1
  2. Put another way: An investment of $10,000 at the start of 1920 in the DJIA would have resulted in a portfolio today worth $2.2 million—without counting dividends! Not shabby.
  3. U.S. equity markets, on average, are positive three out of four years.
DJIA volatility

Think through the many things we have seen or experienced as a nation and globe over the last 100 years. There have been many wars, natural disasters including earthquakes, volcanic eruptions and hurricanes, past pandemics, oil and nuclear crises, and financial crises and recessions. Yet here we are today, with long-term value creation, despite periods of volatility. As a point of disclosure: investing in stocks and bonds is not for everyone, and it is important for investors to consult with a financial advisor about what is best for their personal situation.

The tax-management opportunity for investors today

Here are three practical tax-management suggestions and potential actions that can be taken when investors ask, What can I do about this volatility we are experiencing right now?

These are specific to clients that have had tax bills they would rather have not been paying or have investments with embedded gains they would like to transition out of but taking action would result in a tax bill if sold:

  1. Mutual fund or ETF portfolios
  2. Separately managed accounts (SMA)
  3. Concentrated stock positions

Transitioning out of some of these investments and into a tax-managed portfolio that is more suitable for non-qualified accounts makes sense to most, but the trick and challenge is how to do it without getting saddled with a larger-than-expected tax bill in the process.

1. Mutual fund and ETF portfolios

There are two things I think are important to consider with transitioning this type of portfolio: a) the breakdown of embedded gains by tax lots; and b) the actual embedded gain today in total.

What many fund investors often don’t realize is that their actual embedded gain is smaller than they think. The reason for this is the fact that in the vast majority of cases there have been sizable capital gain distributions paid out annually. The end result of these so-called distributions is that investors pay a significant amount of their taxes along the way. This makes the cost of transitioning lower.

Think about this in terms of total tax cost, and tax cost by tax lot. The cost of transitioning could be further reduced by using market volatility and market downturns to lower the tax bill. Think about a 10% drop in the market in a short period of time. With the reality of an already reduced tax bill due to taxes having been paid, the loss harvesting opportunity during a market downturn could reduce or even eliminate an investment portfolio’s tax bill.

We feel this is a great time to take a good look at accounts of clients that have expressed unhappiness at past tax bills (or said differently, screamed bloody murder when they saw how large the check to the IRS was). Consider what can be done to transition them out of those investments and into a tax-managed portfolio that is more suitable for their taxable situation. Instead of a conversation of unease about the markets, a more productive conversation about after-tax wealth growth and tax management can help demonstrate greater value in front of clients.

Tax-managed investing

Help Maximize your client's after-tax wealth

Learn more

2. Separately managed accounts

While SMA portfolios often run into the same challenges as funds when it comes to how do you move without triggering big tax bills?, they do often have a more unique problem. That problem is an actual large embedded gain with little flexibility to make changes when you hit a point referred to as lock-up.Lock-up happens when most losses have been harvested and the portfolio is loaded with positions that have large embedded gains. This situation happens surprisingly often, and after a significant bull market run, clients are now holding onto a portfolio that could be getting stale–and with a large embedded gain and tax bill, that makes moving very difficult.

What can be done about this? Once again, we believe using the market volatility and down movements could be advantageous and open up flexibility with these portfolios. While the markets as a whole have come down, some sectors/industries/stocks have moved down even more. This is a great time to do some analysis on SMA portfolios that may be in your book of business. In some cases, the embedded tax situation may be down to a tolerable point for a client to transition out of the portfolio. Or, there might be loss harvesting opportunities that could help eliminate at least part of the client’s gain position, allowing a partial transition to occur.

3. Concentrated stock positions

The opportunity here is similar in nature to that of what can be done with a SMA portfolio, but in a more focused or possibly more limited manner. That being said, it is worthwhile to see how much of an embedded gain in concentrated positions has decreased with the recent down-market movements. At a minimum, you can discuss with the client and see if a move makes sense. At best, a concentrated position can be moved out of and proceeds transitioned into something that makes longer term tax-sense for the client.

Take action – limited time opportunity

Any which way you look at it, there is an opportunity to help clients improve the after-tax wealth results in their portfolio right now. This is one of those limited-time opportunities to better align taxable investment portfolios by using the market volatility to lower—and even possibly eliminate—a client’s tax bill. Even more importantly, we believe it's also a great time to help clients move toward a tax-managed solution for long term alignment and after-tax growth.

1Source: Factset.com

Disclosures
The Dow Jones Industrial Average (DJIA), is a stock market index that measures the stock performance of 30 large companies listed on stock exchanges in the United States.
These views are subject to change at any time based upon market or other conditions and are current as of the date at the top of the page. The information, analysis, and opinions expressed herein are for general information only and are not intended to provide specific advice or recommendations for any individual or entity.
This material is not an offer, solicitation or recommendation to purchase any security.
Forecasting represents predictions of market prices and/or volume patterns utilizing varying analytical data. It is not representative of a projection of the stock market, or of any specific investment.
Nothing contained in this material is intended to constitute legal, tax, securities or investment advice, nor an opinion regarding the appropriateness of any investment. The general information contained in this publication should not be acted upon without obtaining specific legal, tax and investment advice from a licensed professional.
Please remember that all investments carry some level of risk, including the potential loss of principal invested. They do not typically grow at an even rate of return and may experience negative growth. As with any type of portfolio structuring, attempting to reduce risk and increase return could, at certain times, unintentionally reduce returns.
The information, analysis and opinions expressed herein are for general information only and are not intended to provide specific advice or recommendations for any individual entity.
Russell Investments’ ownership is composed of a majority stake held by funds managed by TA Associates with minority stakes held by funds managed by Reverence Capital Partners and Russell Investments’ management.
Frank Russell Company is the owner of the Russell trademarks contained in this material and all trademark rights related to the Russell trademarks, which the members of the Russell Investments group of companies are permitted to use under license from Frank Russell Company. The members of the Russell Investments group of companies are not affiliated in any manner with Frank Russell Company or any entity operating under the “FTSE RUSSELL” brand.
The Russell logo is a trademark and service mark of Russell Investments.
Copyright © 2020 Russell Investments Group, LLC 2020. All rights reserved. This material is proprietary and may not be reproduced, transferred, or distributed in any form without prior written permission from Russell Investments. It is delivered on an “as is” basis without warranty.
Russell Investments Financial Services, LLC, member FINRA (www.finra.org), part of Russell Investments.
RIFIS 22550

Taxman: There’s one for you, nineteen for me . . .

Advisors should know the difference between marginal and effective tax rates.  Here’s why it matters and how to make it a part of your client discovery.

You don't have to be in the top tax brackets to feel the pinch of the taxman.

George Harrison of the Beatles clearly understood the role that taxes had on his wealth. In his 1969 anti-tax song (Taxman), Harrison was facing a marginal tax rate of 95%! In disbelief, he and fellow Beatles penned one of the greatest anti-tax songs. For those too young or unfamiliar with the song, I encourage you to check it out on iTunes, Pandora, Spotify or wherever you stream or rent your music.

Although the marginal rate for U.S. investors is well below the 95% rate, taxes still play a huge role in determining one’s residual wealth. Taxable investors often ask:  When should I care about taxes?  Aren’t they only the concerns of the super wealthy like Paul McCartney, Ringo Starr and others in the top brackets?  Here’s how you can help your client understand when to be concerned.

Marginal, average, effective tax rate? Know the differences.

Marginal vs effective tax rates

You must know both to make informed investment decisions about tax-smart investing. And don’t forget to include state and/or local taxes when looking at both in any calculation.

Tax-smart investing provides the opportunity to lower the effective tax rates and may help lower one’s marginal tax rate.

Who cares about taxes?

The short answer: It depends.  You don’t have to be in the top tax brackets to feel the pinch of the taxman.  Consider the marginal tax rates below on taxable income.  This rate applies to income such as wages, interest income, short-term capital gains and non-qualified dividends.  This includes things like interest income from CDs, savings accounts, earned income, a stock sold with less than a year holding period, etc.

Chart of tax rates

Source: Internal Revenue Service

Your clients (married filing joint status) that have taxable income north of $78,950 are facing a marginal tax headwind of $0.22 out of each incremental $1.00 earned.Their federal marginal tax rate would be 22%.They would keep this federal marginal rate until taxable income crosses $168,400, at which point their marginal rate would increase to 24%. This is the progressive nature of U.S. individual tax rates. Generally, the more you make, the more you pay.

If this couple had federal taxable income of $90,000 that included wages, interest income, short-term capital gains and non-qualified dividends, their effective tax rate would be:

Taxable income example

For this couple with $90,000 of taxable income, their marginal tax rate of 22% is materially different than their effective rate of 12.8%.Not knowing the difference or being clear in client discovery can lead to materially different decisions around investment choices, asset location and withdrawal strategies.

The bottom line

When focusing on taxes for your client, remember it’s not necessarily about tax avoidance, but higher ending wealth. Too many investors get hung up on trying to reduce their tax bill that they lose sight of the bigger picture—their long-term financial goal. Working with your client on being tax-smart about their marginal and effective tax rates can make a meaningful difference on achieving successful long-term outcomes.

And if nothing else, be glad that our marginal tax rate is not 95%—as of yet!

If you drive a car - I’ll tax the street;
If you try to sit - I’ll tax your seat;
If you get too cold - I’ll tax the heat;
If you take a walk - I'll tax your feet.   

Taxman (George Harrison)

Disclosures
These views are subject to change at any time based upon market or other conditions and are current as of the date at the top of the page. The information, analysis, and opinions expressed herein are for general information only and are not intended to provide specific advice or recommendations for any individual or entity.
This material is not an offer, solicitation or recommendation to purchase any security.
Forecasting represents predictions of market prices and/or volume patterns utilizing varying analytical data. It is not representative of a projection of the stock market, or of any specific investment.
Please remember that all investments carry some level of risk, including the potential loss of principal invested. They do not typically grow at an even rate of return and may experience negative growth. As with any type of portfolio structuring, attempting to reduce risk and increase return could, at certain times, unintentionally reduce returns.
The information, analysis and opinions expressed herein are for general information only and are not intended to provide specific advice or recommendations for any individual entity.
Russell Investments’ ownership is composed of a majority stake held by funds managed by TA Associates with minority stakes held by funds managed by Reverence Capital Partners and Russell Investments’ management.
Frank Russell Company is the owner of the Russell trademarks contained in this material and all trademark rights related to the Russell trademarks, which the members of the Russell Investments group of companies are permitted to use under license from Frank Russell Company. The members of the Russell Investments group of companies are not affiliated in any manner with Frank Russell Company or any entity operating under the “FTSE RUSSELL” brand.
The Russell logo is a trademark and service mark of Russell Investments.
Copyright © Russell Investments Group, LLC 2019. All rights reserved. This material is proprietary and may not be reproduced, transferred, or distributed in any form without prior written permission from Russell Investments. It is delivered on an “as is” basis without warranty.
Russell Investments Financial Services, LLC, member FINRA (www.finra.org), part of Russell Investments.
RIFIS: 22048

Let us run a tax analysis on your client's investment portfolio.

* Required field

Who cares about taxes? Investors do!

 

Here's one question we believe every investor should be asking their financial advisor: "How do we invest our taxable dollars differently than our tax-sheltered dollars?"

I want to start this blog post with the thought of retraining our brains, challenging the status quo or just better understanding the whole picture. In so many aspects of life, we need to take a step back and retrain or better understand what we are trying to do. In sports, this may mean breaking a bad habit with your golf swing, following through on your free throws or entering a turn too early on a mountain bike or in a race car. We must retrain our brain, challenge our perception and understand why what we are doing isn’t providing us with the outcome we had hoped for.

Sometimes we need a coach, a trainer or an instructor to help us see the larger picture. We may not even know we’re doing something wrong—and that’s OK. What’s not OK is not knowing there are simple changes we can make that can have a dramatic impact on the outcome we intended to have in the first place. For instance, a small adjustment of your grip can dramatically improve your golf swing, snapping your wrist and creating follow-through will increase your free throw percentage and waiting until your appropriate braking marker will help you get around the racetrack that much quicker. 

Investing can be the same. There is an incredible amount of information, and misinformation, on the internet that can both help and harm the average investor. How does one start to wade through the information and find the adjustments they need to make to dramatically impact the outcome?

Plan for the future and make sure your entire portfolio is tax-efficient.

Why work with a financial advisor?

At Russell Investments, we recommend working with a competent financial advisor who seeks to deliver value beyond picking product. This means someone who understands the nuances of the industry, can help you control your investing behavior, plan for the future and make sure your entire portfolio is tax-efficient. Here’s where we come back to challenging the status quo of the average investor: Taxes.

Managing your taxes

There are certain types of accounts that allow special tax treatment. You may already know many of these. At work, you may invest in a 401(k) or 403(b) plan, you and your spouse may have an Individual Retirement Account (IRA) or Roth IRA outside of this plan to supplement your retirement investing, and you may take advantage of a Health Savings Account (HSA) or Flexible Savings Account (FSA) through your employer for medical expenses. We even think about taxes when it comes to our children, by investing in a 529 plan for college savings.

We open all of these types of accounts for one reason: Tax savings. Why is it then, when it comes down to our extra savings, our rainy-day funds, the money we can’t seem to find a tax-sheltered home for, we default back to death and taxes?

Strategies for keeping more of what you make

Wait a second—we likely have way more control than you know. We believe there are ways to maximize your after-tax return and keep more of what you make, even outside a tax-sheltered account. These include strategies such as investing in municipal bonds, tax-loss harvesting, minimizing wash sales, managing holding periods and managing a fund’s yield, to name a few. Again, it’s OK if you don’t know what these strategies involve or how they work, but it’s not OK to not know they are available to you and that we believe they can have a dramatic impact on your investing outcomes.

T is for tax-smart investing

Let’s take a look at a hypothetical example of an investor with $500,000 in investable assets. In the illustration below, we assume the ending wealth difference under three scenarios:

Chart of hypothetical growth of $500,000

Just as you may seek advice on adjustments you can make from a golf pro, a basketball coach or a professional driving instructor, so too should you seek advice from your advisor beyond what your annual portfolio performance is. 

Asking your advisor this one additional question may have a huge difference on your investing future and outcomes:

How do we invest our taxable dollars differently than our tax-sheltered dollars?

The bottom line

An advisor can help you navigate the complex world of tax implications of your investments—asset location across taxable and non-taxable accounts, tax-smart withdrawal strategies, taxable trusts and more. A successful relationship with your trusted financial advisor requires engagement—on both sides. Here are some considerations to be an engaged client:

  • Be open with your advisor about your current situation, goals, circumstances, preferences, values, asset location and other relevant wealth management information—including insurance payouts and inheritance.
  • Engage in proactive, two-way communication with your advisor as your family’s situation changes. This may include the sale of real estate, the sale of a business or other assets due to downsizing.
  • Share with your advisor your annual state/federal tax return to optimize the tax implications of your investments.

Because when it comes to investing, it’s not what you make that counts. It’s what you get to keep.

Disclosures
These views are subject to change at any time based upon market or other conditions and are current as of the date at the top of the page. The information, analysis, and opinions expressed herein are for general information only and are not intended to provide specific advice or recommendations for any individual or entity.
This material is not an offer, solicitation or recommendation to purchase any security.
Forecasting represents predictions of market prices and/or volume patterns utilizing varying analytical data. It is not representative of a projection of the stock market, or of any specific investment.
Nothing contained in this material is intended to constitute legal, tax, securities or investment advice, nor an opinion regarding the appropriateness of any investment. The general information contained in this publication should not be acted upon without obtaining specific legal, tax and investment advice from a licensed professional.
Please remember that all investments carry some level of risk, including the potential loss of principal invested. They do not typically grow at an even rate of return and may experience negative growth. As with any type of portfolio structuring, attempting to reduce risk and increase return could, at certain times, unintentionally reduce returns.
The information, analysis and opinions expressed herein are for general information only and are not intended to provide specific advice or recommendations for any individual entity.
End investors should consult with their financial and tax advisors before investing.
Russell Investments’ ownership is composed of a majority stake held by funds managed by TA Associates with minority stakes held by funds managed by Reverence Capital Partners and Russell Investments’ management.
Frank Russell Company is the owner of the Russell trademarks contained in this material and all trademark rights related to the Russell trademarks, which the members of the Russell Investments group of companies are permitted to use under license from Frank Russell Company. The members of the Russell Investments group of companies are not affiliated in any manner with Frank Russell Company or any entity operating under the “FTSE RUSSELL” brand.
The Russell logo is a trademark and service mark of Russell Investments.
Copyright © 2020. Russell Investments Group, LLC. All rights reserved. This material is proprietary and may not be reproduced, transferred, or distributed in any form without prior written permission from Russell Investments. It is delivered on an “as is” basis without warranty.
Russell Investments Financial Services, LLC, member FINRA (www.finra.org), part of Russell Investments.
RIFIS: 22290

Your words matter! Especially when it comes to taxes

 

What’s the difference between a tax-aware, tax-efficient or tax-managed approach to investing? See why it matters and why we believe managing for taxes can make a difference for investors.

This is a milestone kind of year for me, so forgive me if I’m starting to get a little nostalgic. My triplets are going into middle school next year, my wife and I have been married for 15+ years, and I’m just finishing up my 15th year at Russell Investments, which converts to 50 years in wholesaler years. Whether it’s communicating with my kids, my wife or advisors and their clients, a few things ring true to me—our words matter, and expectations are everything.

Let’s play this out. Russell Investments has also crossed an important milestone with our Tax-Managed Model Strategies. We now have a 15+ year track record to talk about. One thing is very apparent: taxes are hard and the differences between approaches vary wildly.

We now have a 15+ year track record to talk about.

Common approaches observed for non-qualified (taxable) accounts

Below are the most common approaches I see day after day in non-qualifies accounts:

  1. Individual Retirement Account (IRA) is managed the exact same way as the non-IRA.
    • Everything is the exact same. I’m not sure what adjective we’d even use to describe that, but it happens way more than people think.
  2. IRA is managed one way, and the non-IRA uses municipal bonds for fixed income.
    • All of the equity exposure is managed the exact same way from IRA to non-IRA
    • A balanced investor may be thereby ignoring 60% of the tax problem by going with the exact same funds in IRA and non- IRA
  3. IRA is managed one way, and the non-IRA uses a total passive approach using ETFs or index funds.
    • The asset allocation and the weights to the different products are the exact same from IRA to non-IRA
  4. IRA is managed one way, and the non-IRA is totally different.
    • This approach uses a different asset allocation, different funds, different managers and different techniques all geared towards pursuing a better after-tax outcome (more on this—and my favorite—approach later).

So, what’s the difference?

During my travels throughout the year, I see three different adjectives that describe the different approaches to non-qualified accounts that I outlined above: tax-aware, tax-efficient, and tax-managed.

Remember when I said that words matter? Here’s a great example of how widely these approaches differ by definition:

  • Aware – Having knowledge or perception of a situation or fact
  • Efficient – Working in a well-organized and competent way
  • Manage – Succeed in surviving or in attaining one's aims

Why does it matter? Because a tax-managed approach strives for a better after-tax outcome

Let’s take this down to a personal level that everyone can understand: through the lens of academic grades.One of the goals for our triplets is for them to get As and Bs. Many of you probably have done something similar with your kids. Now, let’s relate this to the different approaches we often see with non-qualified portfolios.

  1. If my oldest triplet daughter Addison is getting a C in math, she will be aware (knowledge or perception of a situation or fact)—as will I—but being aware of something doesn’t imply action to do anything about it. How does this apply to non-qualified accounts?
    • Consider scenario #2 above. The non-IRA uses municipal bond funds for the fixed income weighting, but all the equity weights are the exact same between the IRA and non-IRA. We think we can do better.
  2. If my middle triplet Emily is getting a B in science, not only is she AWARE of her grade—and again, so are we—but she’ll say to me, Dad, a B is pretty good, and I already understand Science really well. I feel like I’m being efficient in my work in science class, so I can study other things that are harder for me. I’m working in a well-organized and competent way. BUT, she’s not applying herself or trying to manage to the best outcome, which would be an A in science class.
    • Consider scenario #3 above. The non-IRA is using inherently efficient ETFs/index funds. Awareness is one thing, being inherently efficient is another, but the next step is managing to taxes—that’s a completely different ballgame. We think we can do better.
  3. If my youngest triplet Hailey is getting an A in English class, she is managing her course load while setting a high bar for herself. As parents, we’ve set that goal or outcome for our kids. Then, when they manage all of the things thrown at them, they can then succeed in attaining their outcomes. That is the definition of manage.
    • Consider scenario #4 above. Managing implies action, not just one time, but consistent action to sustain the desired outcome. There is a big difference between being competent (part of the definition for being efficient) and being successful (part of the definition of manage).

Managing for taxes and the difference it can make for investors

Consider the following two scenarios addressing individuals and advisors and the manage aspect of non-IRA accounts:

1. Most (if not all) individual investors wait until post-Thanksgiving at year-end to engage in their tax-loss harvesting exercises on their non-IRA accounts … more on this in the chart below.

2. Many advisors find it hard to scale their loss-harvesting activities across hundreds of different non-IRA accounts within their entire book of business. It becomes increasingly challenging as each advisor's client establishes his or her own cost basis when they invest.

If we can agree that a huge part of the manage phase within a non-IRA account is tax-loss harvesting, why do we wait to do tax-loss harvesting until year-end? 

Indeed, the IRS does allow tax-loss harvesting to happen in any of the 12 months of the calendar year. How has year-end tax-loss harvesting worked out over the last 68 years? The chart below outlines the average monthly return as well as the number of up market months and down market months in the S&P 500 since 1950.

Chart of monthly S&P 500 returns, 1950-2018

Note: Past performance is no guarantee of future results.

It’s ironic that individual investors are looking for loss-harvesting at year-end, which over the last 68 years has been the worst time to be looking for losses,  as the months of November and December are typically the two of the best market months in terms of market returns.

When should we be looking for losses instead? Ideally, in the months where the market is down … but, if you’re like my family, this is the last thing we’re doing in February, June, August and September:

What we’re actually thinking about instead of loss-harvesting portfolios:

  • February – how to get out of the frozen tundra of Wisconsin
  • June and August – where should we go on our summer family vacation
  • September – what do we need to do to get ready for school again

We believe in managing with a purpose.

So, what’s your process for managing non-IRA accounts?

When you partner with Russell Investments for non-IRA accounts, you’re employing a time-tested process that is so much more than just tax-loss harvesting at year-end. We believe in managing with a purpose.

Our trading desk is staffed 24 hours a day by traders averaging more than 15 years of experience across the investment spectrum. Our team is systematically looking for loss positions 12 months out of the year to offset taxable gains.

Remember: Words matter when it comes to taxes

The next time you’re dealing with a non-IRA account, look at the word choice. By partnering with Russell Investments and our tax-managed approach, you know that we are singularly focused on maximizing the investor’s after-tax return. When you manage to a certain expectation, you are looking to drive better results using ALL the investment capabilities. It’s not what you make, it’s what you keep. Let us find a way to help you keep more.

Disclosures
Qualified – This category includes tax-advantaged accounts—either tax-exempt or tax-deferred—such as IRA’s, 401Ks, 403Bs, 529s, and HSAs. In these types of accounts, investors may receive distributions in the form of dividends and capital gains or may buy and sell positions without any tax implications.
Non-qualified – These are taxable accounts where investment income is taxed annually. Direct-bought mutual funds, bank accounts and brokerage accounts are some examples.
Fund objectives, risks, charges and expenses should be carefully considered before investing. A summary prospectus, if available, or a prospectus containing this and other important information can be obtained by calling (800) 787-7354 or visiting https://www.russellinvestments.com. Please read the prospectus carefully before investing.
Mutual fund investing involves risk, principal loss is possible.
Model Strategies represent target allocations of Russell funds; these models are not managed and cannot be invested in directly. You and your financial advisor may work to combine selected funds that differ from the illustrated combinations depending upon individual investment objectives. Model Strategies are exposed to the specific risks of the funds directly proportionate to their fund allocation. The funds comprising the strategies and the allocations to those funds have changed over time and may change in the future.
Income from funds managed for tax efficiency may be subject to an alternative minimum tax, and/or any applicable state and local taxes.
These views are subject to change at any time based upon market or other conditions and are current as of the date at the top of the page. The information, analysis, and opinions expressed herein are for general information only and are not intended to provide specific advice or recommendations for any individual or entity.
This material is not an offer, solicitation or recommendation to purchase any security.
Nothing contained in this material is intended to constitute legal, tax, securities or investment advice, nor an opinion regarding the appropriateness of any investment. The general information contained in this publication should not be acted upon without obtaining specific legal, tax and investment advice from a licensed professional.
Please remember that all investments carry some level of risk, including the potential loss of principal invested. They do not typically grow at an even rate of return and may experience negative growth. As with any type of portfolio structuring, attempting to reduce risk and increase return could, at certain times, unintentionally reduce returns.
The information, analysis and opinions expressed herein are for general information only and are not intended to provide specific advice or recommendations for any individual entity.
This material is proprietary and may not be reproduced, transferred, or distributed in any form without prior written permission from Russell Investments. It is delivered on an "as is" basis without warranty.
Russell Investments’ ownership is composed of a majority stake held by funds managed by TA Associates with minority stakes held by funds managed by Reverence Capital Partners and Russell Investments’ management.
Frank Russell Company is the owner of the Russell trademarks contained in this material and all trademark rights related to the Russell trademarks, which the members of the Russell Investments group of companies are permitted to use under license from Frank Russell Company. The members of the Russell Investments group of companies are not affiliated in any manner with Frank Russell Company or any entity operating under the “FTSE RUSSELL” brand.
The Russell logo is a trademark and service mark of Russell Investments.
Copyright © Russell Investments Group, LLC 2019. All rights reserved. This material is proprietary and may not be reproduced, transferred, or distributed in any form without prior written permission from Russell Investments. It is delivered on an “as is” basis without warranty.
Securities products and services offered through Russell Investments Financial Services, LLC, member FINRA (www.finra.org), part of Russell Investments.
RIFIS: 21906

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