New American Funds Tax-Aware Model Portfolios Now Available

Orion Portfolio Solutions is excited to announce the addition of four tax-aware model portfolios from Capital Groups’ American Funds, effective June 23, 2020. Now available, globally, through our Strategic mandate, and for use in UMA model portfolios, the additional tax-managed models span four risk bands, each investing in a diversified mix of underlying American Funds mutual funds.

About the Model Portfolios

American Funds Model Portfolios offer diversified allocations overseen by their Portfolio Solutions Committee, a group of managers with decades of collective investment industry experience. In managing the models, the committee uses an objective-based, bottom-up process, which includes rigorous analysis of the underlying funds. As part of their ongoing management and oversight, the committee regularly monitors each model portfolio and its underlying funds to ensure alignment with the model portfolio’s investment objective.

The tax-aware model portfolios were designed to:

Focus on investor goals:

  • Underlying funds are selected first on their ability to help model portfolios pursue specific objectives, and then on their ability to help increase tax efficiency.

Reduce taxable distributions:

  • To help reduce investors’ tax bills, model portfolios’ bond allocations are in tax-exempt bond funds instead of taxable bond funds.

Reduce short-term capital gains:

  • Many of the underlying funds have low turnover rates, helping reduce short-term capital gains. Also, underlying fund managers may offset fund gains with losses, when appropriate.

Model Portfolios Now Available

American Funds Tax-Aware Conservative Income Model Portfolio

  • Seeks to provide tax-exempt, current income and preservation of capital for investors through a diversified portfolio of tax-exempt fixed income securities and dividend-paying equities.

American Funds Tax-Aware Growth and Income Model Portfolio

  • Seeks to provide investors with long-term capital growth through a variety of stocks, and income through dividend-paying companies and tax-exempt fixed income securities.

American Funds Tax-Aware Moderate Growth and Income Model Portfolio

  • Seeks long-term growth and current income for investors through a global mix of stocks and tax-exempt bonds.

American Funds Tax-Aware Moderate Income Model Portfolio

  • Designed for investors who seek lower volatility and a source of tax-exempt income, while secondarily seeking long-term growth through dividend-paying equities.

Fun Facts

  • American Funds’ Portfolio Solutions Committee is supported by seven different quantitative and qualitative research teams.
  • Orion Portfolio Solutions now offers the entire suite of American Funds’ models, available to advisors.

Learn More

The model fact sheets are now available within the Marketing Material section of the Orion Portfolio Solutions Advisor Portal. Log in to learn more.

For more information, please contact your Orion Portfolio Solutions Regional Sales Team at 800.379.2513 option 1.