PORTAX After-Tax Portfolio Analysis

The PORTAX Optimization centers around a main graph that displays different optimization strategies ranging from after-tax risk minimization to tax minimization for a range of portfolio return targets.  The Return Lines connect all portfolios with the same return target, but different optimizer strategies.  The Tax Index lines connect all portfolios with the same optimizer strategy, but different return targets.  A tax index of 0% means after-tax risk minimization, a tax index of 100% means tax minimization, and a tax index between 0% and 100% is a hybrid of both minimizations.

The graph includes two naïve benchmark portfolios: Drift and Rebalance.  The Drift portfolio is a passive strategy that involves no active reweighting period to period.  The Rebalance portfolio uses the starting weights corresponding to each asset’s starting market value in period 1 and readjusts to these weights in all subsequent periods.

The graph also includes sixteen available What If portfolios.  These are projection portfolios where the user can select their own asset weights in each period.  The What If portfolios are useful for creating customized benchmarks and analyzing investor strategies.