From 1/1/2020 - 3/31/2022, we calculate that weekly tax-loss harvesting would have generated an additional 3.0% in annualized return for an investor with a long-term capital gains rate of 15% and an assumed ordinary income tax rate of 32%. This additional return is based on 100% investment in equity; the weighted average benefit for an entire portfolio would depend on an investor’s risk score and asset allocation.
This analysis excludes transaction and management fees, as well as ESG or other customizations. Depending on your income, the benefit can range from 2-4%. Past performance is no guarantee of future results.