The enhancement allows U.S. clients to evaluate their portfolio or investment program returns after state, federal and alternative minimum taxes (AMT), giving them a thorough view of their portfolio performance on an after-tax basis and allowing them to further customize their returns to the state level.
U.S. tax obligations, particularly those that apply to municipal bonds, are complex and vary based on the state domicile of the investor. Northern Trust’s performance tools are able to capture this complexity and model the impact of U.S. federal and state tax laws on portfolio returns, allowing clients to model tax liabilities at a granular level. In addition, Northern Trust’s performance calculations can take into account the nature of the securities and investment activity of the portfolio, as well as the U.S. state location and tax obligations of the investor.
“Given the increasing complexity of the U.S. tax code, the ability to evaluate state tax obligations on investment portfolios remains important to individuals, asset owners and asset managers,” said Louisa Taylor, director of family office services, wealth management group, at Northern Trust.