Allspring’s Manju Boraiah Explains How to Keep Tax Costs Down Across a Whole Portfolio

Tax efficiency is often treated as an equity problem. Manju Boraiah, Global Head of Systematic Fixed Income and Custom SMA at Allspring Global Investments, sees it differently. We spoke with Manju at FutureProof 2026 about unwinding concentrated positions, what drives loss harvesting, and why bonds shouldn’t be left out.

The Daily Upside: How should advisors think about clients with concentrated stock positions?

Concentrated stock exposure is one of the biggest challenges and opportunities in the US wealth space right now. Total US household wealth is around $91 trillion, and roughly $49 trillion of that sits with high net worth investors. Some estimates put the concentrated portion of that between $5 trillion and $11 trillion. That’s a massive pool of assets sitting in one or two stocks, or a handful. The challenge for advisors is minimizing the downside risk, because when a portfolio is concentrated, the entire financial plan is exposed to single stock volatility. You can’t simply liquidate, because that triggers a huge tax bill, as high as 35% in high tax states even with the long-term gains rate. The solution is diversifying gradually, over a multi-year transition plan with guardrails around it.

The Daily Upside: Direct indexing has become a go-to strategy here, but results vary. What should advisors know?

I think about direct indexing as a spectrum of solutions. There’s long-only direct indexing, long-short equity SMAs, and option overlays. Direct indexing is the more elegant solution for diversifying that exposure, and it allows for a flexible plan. We run transition plan analysis for single stock exposures, which gives advisors a glide path and helps them understand the pros and cons of liquidating versus moving into a diversified portfolio over time. You can also run scenario analysis, which helps advisors work out the right glide path for a particular client.

The Daily Upside: How do advisors balance tax savings against staying close to an index?

There are two things to balance: the tax cost you realize when you liquidate a portion of the stock, and how closely you track the index, which you measure through tracking error. You’re looking at an efficient frontier, minimizing tax cost while minimizing tracking error. That frontier is different for every portfolio, so mapping it is the starting point. From there it comes down to the client’s objectives and timeframe. A client who wants to be aggressive can carry a higher tax budget and diversify more quickly, but will realize higher tax costs doing it. A more conservative client with a longer timeframe can set tight guardrails around tax cost and work through it methodically over a multi-year horizon. Balancing the two is the secret sauce.

The Daily Upside: After an extended bull market, what are the other opportunities for tax loss harvesting?

Market direction and the opportunity to harvest losses are largely disconnected, in my view. What drives tax loss harvesting is individual stock dispersion. Whether markets are trending up or down, there’s always a portion of stocks underperforming and a portion outperforming, and that dispersion ebbs and flows over time. As dispersion moves, the opportunity to harvest moves with it. That’s why tax loss harvesting is an all-weather strategy. You can apply it in any market condition.

The Daily Upside: If the goal is to track a benchmark, how does a provider differentiate?

It comes down to execution. The tax-aware transition plan is part of it, so having better structure and flexibility there is where we start. The second piece is the nimbleness to put that plan to work: rebalancing portfolios daily, optimizing, and looking for opportunities to harvest losses. Build, execute, and track. Those are the three things we do really well.

The Daily Upside: Advisors may assume this is equity-specific. What’s possible on the fixed income side?

The threshold on the bond side is slightly higher, because bonds aren’t easy. There are transaction costs, there’s friction, and there’s the availability challenge. But you can still apply the strategy systematically. At Allspring we were one of the first adopters of tax loss harvesting in the bond space, starting with munis, and then applied it to taxable fixed income. In a typical 60/40 portfolio, 40% sits in fixed income, so you need the ability to apply tax efficiency across the whole portfolio. The tax alpha opportunity in fixed income is minimal, but it exists, and applying tax efficiency across both equity and fixed income is quintessential for advisors.

The Daily Upside: What’s the one thing advisors should take away, and what should they be asking providers?

Two things: the consistency of the investment process, and its flexibility. Can a provider apply the same process across different account sizes and different client objectives, and can they modify the plan as market conditions change? When advisors are talking to providers, they should understand the investment process, how the multi-year transition plan is designed and executed, what the options are, and how consistently the provider applies it across account sizes. Those are the key things to look out for.

Disclaimer:

Investing involves risk, including the possible loss of principal. Diversification does not ensure or guarantee better performance and cannot eliminate the risk of investment losses.

Unless otherwise stated, Allspring Global Investments (Allspring) is the source of all data (which is current or as of the date stated). Content is provided for informational purposes only. Views, opinions, assumptions, or estimates are not necessarily those of Allspring or their affiliates, and there is no representation regarding their adequacy, accuracy, or completeness. They should not be relied upon and may be subject to change without notice.

Advisory accounts may not be suitable for all investors. Advisory products are not generally designed for frequently traded or inactive accounts. Tax loss harvesting is the selling of investments at a loss so that losses can be used to offset gains on the sale of other investments—thereby reducing capital gains tax owed. Proceeds from the sale may be used to purchase similar securities to maintain the general composition of the investment portfolio. Tax alpha refers to the additional value or returns generated in an investment portfolio by incorporating strategies that minimize tax liabilities, such as tax-loss harvesting.

Allspring Global Investments does not provide accounting, legal, or tax advice or investment recommendations. Any tax or legal information in this document is merely a summary of our understanding and interpretations of some of the current income tax regulations and is not exhaustive. Investors should consult their tax advisor or legal counsel for advice and information concerning their particular situation.

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