PGIM CUSTOM HARVEST U.S. EQUITY PLUS
Minimize or reduce taxes by capturing capital losses that may be used to offset capital gains inside or outside the portfolio.
PGIM CUSTOM HARVEST SMAS
As a leader in direct indexing using ETFs, PGIM Custom Harvest offers strategies that seek to provide exposure to client-selected benchmarks while seeking to generate tax alpha
WHY PGIM CUSTOM HARVEST
PGIM Custom Harvest is a leader in the development of tax-beneficial investment strategies using exchange-traded-funds (ETFs) for clients seeking improved after-tax outcomes. Our separately managed accounts (SMAs) seek to provide exposure aligned with a client-selected benchmark while generating tax alpha. These portfolios can be customized to meet individual client needs.
CUSTOMIZED EXPOSURE
Personalized investment experience and calibrated risk management based on each client’s individual goals, needs, tax situation, and risk profile
SIGNIFICANT TAX BENEFITS
Aim to efficiently generate significant tax benefits in both rising and falling markets with the potential to harvest tax benefits throughout the trading day
FULLY INVESTED STRATEGIES
Full market participation through portfolios of ETFs provides enhanced opportunities for tax loss capture in down markets and appreciation in up markets
SIMPLICITY AND EFFICIENCY
Less complexity and fewer holdings than traditional direct indexers with integrated technology that continually monitors for tax alpha opportunities
A DIFFERENTIATED APPROACH
BENEFITS OF USING ETFS TO DIRECT INDEXING
Direct indexing typically involves buying the individual stocks that make up an index, in the same weights as the index. Direct indexing can provide greater autonomy, control, and tax advantages over owning an index mutual fund or ETF because investors can sell securities in their portfolios to offset capital gains. For taxable clients, we believe the best way to direct index is through ETFs that are tailored to provide the desired market exposure plus tax benefits. Our active tax management discipline aims to deliver tax efficiency through a loss capture process that is designed to help offset both capital gains within the portfolios and realized gains outside of the portfolios.
TAX-LOSS HARVESTING
Loss harvesting is the process of capturing capital losses in a client portfolio which can be applied against capital gains. The result can be reduced tax exposure and higher after-tax returns. Our proprietary Smart Capture discipline combines benchmark investing and active tax-loss management, providing an opportunity to harvest losses in both up and down markets. This discipline has historically been effective at harvesting losses as the process keeps portfolios fully invested, providing the opportunity for enhanced tax-loss capture and helping to limit tracking error. We can help investors with ongoing tax burdens within their portfolios, as well as from taxable events outside of their portfolios.
SMART CAPTURE INVESTMENT PROCESS
We use a disciplined investment process to provide full exposure to a desired allocation or benchmark while generating tax alpha through customized SMA portfolios of ETFs. Our proprietary Smart Capture Technology identifies, targets, and facilitates efficient trading throughout the market day, using the following steps:
- Identify optimal ETFs for each exposure
- Construct customized portfolios of ETFs to target desired allocation or benchmark
- Determine optimum tax benefit capture trading thresholds
- Monitor all ETFs and legacy client positions throughout the day
- Harvest tax losses while maintaining full market exposure
Featured Strategies
PGIM Custom Harvest provides innovative, tax-beneficial investment solutions and services to help clients achieve their goals. Our investment strategies are designed to provide investors with broad exposure to the equity and fixed income markets with minimal tracking error while maximizing after-tax returns.
PGIM CUSTOM HARVEST GLOBAL EQUITY PLUS
Seeks to provide broad global equity market exposure while capturing tax benefits.
PGIM CUSTOM HARVEST U.S. EQUITY PLUS 50% HEDGED
Seeks to provide 50% of the return of the broad domestic equity market by reducing equity market risk and capturing tax benefits.
Experienced Investment Team
Robert Holderith is the head of PGIM Custom Harvest (formerly known as Green Harvest Asset Management).* Robert joined PGIM Investments in December 2021 and founded Green Harvest in 2017. He was previously president and founder of Emerging Global Advisors, LLC (EGA), the advisor to the EGShares family of ETFs, where he was responsible for all aspects of the formation of the firm, including research, portfolio management, product development, index conception and design, technology infrastructure, and sales. Robert has been implementing, structuring, and developing ETFs and related strategies since 1999.
Brian Jacobs, CIMA, is the head of client portfolio management at PGIM Custom Harvest (formerly known as Green Harvest Asset Management).* Brian joined PGIM Investments in December 2021 and helped found Green Harvest in 2017. He was previously the president of Direxion ETFs and the CEO of the Hatteras Alternative Funds. Additionally, he led distribution organizations at Eaton Vance and Allianz/PIMCO, which raised over $200 billion in AUM during his tenure. Brian received a B.A. in economics from Montclair State University and completed the Allianz Global Leadership Program at the International Institute for Management Development (I.M.D.) in Lausanne, Switzerland. Brian is also an adjunct Faculty member at the Gabelli School of Business at Fordham University where he teaches a graduate-level class: Disruption in Financial Services.
Jeff Conway, CFA, CAIA, is the chief investment officer at PGIM Custom Harvest (formerly known as Green Harvest Asset Management)* and is responsible for the overall investment strategy and portfolio management. Jeff joined PGIM Investments in December 2021 and helped found Green Harvest in 2017. He was previously head of Equity and Commodity Derivative Structuring for UBS in New York, where he was responsible for derivative trading strategies and structured product development. Prior to his tenure at UBS, he worked at Morgan Stanley in the Fixed Income Derivative Product Group. Jeff received a B.A. in economics from the University of New Hampshire and an MBA from the MIT Sloan School of Management with a concentration in Financial Engineering. Jeff also holds the CFA and CAIA designations.
Denise Gallo is the senior portfolio manager at PGIM Custom Harvest (formerly known as Green Harvest Asset Management)* and is responsible for day-to-day management of separately managed accounts and oversees operational and back-office functions. Denise joined PGIM Investments in December 2021 and joined Green Harvest in 2018. She was previously an associate portfolio manager at Columbia Threadneedle Investment (CTI) where she served as a portfolio construction subject-matter expert for the ETF business. In 2016, CTI acquired Denise’s former firm, Emerging Global Advisors (EGA), which was a $1.9B emerging and frontier market ETF firm. Denise joined EGA in 2009 as head of fund operations. Denise attended college at Fairleigh Dickinson and has graduated multiple management and trading courses from Merrill Lynch, Columbia Threadneedle, and EGA.
The After-Tax Advantages of Direct Indexing
Stuart Parker talks to Robert Holderith, Head of PGIM Custom Harvest, about pursuing better after-tax outcomes through direct indexing on The Inside Track.
Loss Harvesting Amid a Rising Market With Narrow Breadth
PGIM Custom Harvest shares views on the ever-evolving tax-loss harvesting landscape & how direct indexing can help investors capture stronger after-tax returns.
Tax-Loss Harvesting Helps Limit The Impact Of Ongoing Volatility
Head of PGIM Custom Harvest, Robert Holderith, shares how tax-loss harvesting can help drive long-term wealth management success throughout market cycles.
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*PGIM Investments acquired Green Harvest Asset Management (now known as PGIM Custom Harvest) in December 2021.
Alpha is a measure of the investment’s value added based on its beta or market-related risk profile. Tracking error is the difference in actual performance between a portfolio and its corresponding benchmark.
The MSCI All Country World (ACWI) Index is a market capitalization-weighted index designed to provide a broad measure of equity-market performance throughout the world and is comprised of stocks from both developed and emerging markets. The S&P 500 Index is a market capitalization-weighted index of 500 companies primarily traded on the New York Stock Exchange.
Risks—Investing involves risks. Some investments are riskier than others. The investment return and principal value will fluctuate, and shares, when sold, may be worth more or less than the original cost. Actively managed portfolios may carry additional risks, such as analyses performed cannot always predict outcomes, that the investment techniques applied do not have the expected results, and that external factors can change the course of investment performance. The fees associated with active management may be higher than those associated with passive strategies. Unlike mutual funds, ETF shares are bought and sold at market price, which may be higher or lower than their net asset value (NAV), and are not individually redeemed from the Fund. Shares may only be redeemed directly from the Fund by Authorized Participants in creation units only. You may incur brokerage commissions when buying and selling shares on an exchange or through your financial intermediary, which may reduce returns. Market returns are based upon the closing price or the midpoint of the bid/ask spread, as applicable, at the time when the Fund’s NAV is determined (normally 4:00 p.m. Eastern time), and do not represent the returns you would receive if you traded shares at other times. There can be no guarantee that an active trading market for ETF shares will develop or be maintained, or that their listing will continue or remain unchanged. While the shares of ETFs are tradable on secondary markets, they may not readily trade in all market conditions and may trade at significant discounts in periods of market stress.
The availability of tax alpha is highly dependent upon the initial date and time of investment as well as market direction and security volatility during the investment period. Tax loss harvesting outcomes may vary greatly for clients who invest on different days, weeks, months, and all other time periods. A client's tax alpha will depend on the client's individual circumstances, which are outside of PGIM Custom Harvest's knowledge and control.
PGIM Custom Harvest does not provide tax, legal, or accounting advice. This material is for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any transaction. Although PGIM Custom Harvest does not provide tax, legal, or accounting advice, we stand ready to assist clients and their advisors in reviewing the relevant tax rules.
SMAs differ from pooled vehicles like mutual funds in that each portfolio is unique to a single account therefore the investment decisions may vary from those made for other accounts. SMAs do not issue registered prospectuses, and the fee structures differ from those normally seen in mutual funds and generally carry higher account investment minimums. Please remember that there are inherent risks involved with investing in the markets, and investments may be worth more or less than initial investment upon redemption. There is no guarantee that the investment managers' objectives will be achieved. Professional money management is not suitable for all investors. Investment objectives, risk tolerance, and liquidity needs must be reviewed before suitable programs can be recommended. Asset allocation and diversification strategies do not assure a profit or protect against loss in declining markets. Investors should consult with their attorney, accountant, and/or tax professional for advice concerning their particular situation.
PGIM Custom Harvest is a registered investment adviser and a Prudential Financial company. © 2023 Prudential Financial, Inc. and its related entities. PGIM Custom Harvest, PGIM Investments, PGIM, and the PGIM logo are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.
Investment Products: Are not insured by the FDIC or any other federal government agency, may lose value, and are not a deposit of or guaranteed by any bank or any bank affiliate.
For compliance use only 1055227-00006-00