Subject: Re: Direct Indexing with Tax Loss Harvesting
This fund strikes me as a "baffle them with bulls..t" story.

Come up with a complicated strategy, toss in some cherry-picked half-believable story about avoiding or mitigating losses, great story about a new and exciting way to reduce your taxes. And see how many fish you can reel in.

It is well-known that people think a complex strategy is superior to a simple, transparent, easy to understand strategy. Sounds to me what they are doing here, making a complex, hard to understand the detailed workings of, difficult to unwind, investment.
With a sprinkling of sweet-sounding fluff (tax-loss-harvesting).

Prediction: Financially it is going be like almost all of these fund offerings. Lower performance than a broad market index, with higher costs.

You do you. I would just buy VOO or VTI and call it a day.


they are trying to target the return+ of the benchmark
Have you ever heard of a fund that is trying to do WORSE than the benchmark?

unlike the ETF they are not required to buy the now spiraling up in cost new entry and sell the plunging shares of the company exiting the index
This is funny, in that a recent study has said that when the S&P500 drops one stock and adds another, the dropped stock does better and the new stock underperforms. !! There is a screen proposed that would buy the dropped stock and sell (short) the new stock.
Weird.

I hope that it was you saying "spiraling up" and "plunging" and not them. Although, what's the problem with selling a stock that is going down and buying a stock that is going up?




In actuality over a long term, tax-loss-harvesting is just a nit. For a one-time buy-and-hold (of a good stock) you will fairly quickly have gotten it at the lowest price it will ever be at in the future. So no more losses to harvest.
Yes, that can well be different for holdings that you DCA by buying a little bit each month. Those might well see a loss in the near future. But so what? A couple hundred bucks of loss in a $20,000 holdings is negligible.

Also the "similar" stocks are generally not similar. For example, Home Depot and Lowes are *not* similar investments. Have you seen their chart? https://testfol.io/?s=lNAON7n4...
The worst part about "almost similar" stocks would be that you get stuck in the worst of the pair when the tax losses stop. Like if you switched to LOW on 2/27/2009.

Maybe you could argue that the SPY/VOO pair would work. But I understand that the IRS considers them "essentially identical" and would not allow it.