Alfred Lee: Top Tax-Loss Harvesting Trade Ideas


Top Tax-Loss Harvesting Trade Ideas

Implementing a Tax Strategy as Year-End Approaches.

by Alfred Lee, CFA, CMT, DMS
Vice President, BMO ETFs
Portfolio Manager & Investment Strategist
BMO Asset Management Inc.

November 14, 2013

What is Tax-Loss Harvesting?

  • Tax-loss harvesting is a year-end strategy for investors to try to reduce their tax liabilities. By disposing of securities with accrued capital losses, investors can help offset taxes incurred by other parts of a portfolio that were sold at a capital gain in the year or in the prior three years. These proceeds from the sale of securities can then be reinvested in a different security with a high correlation to the disposed security to maintain market exposure.
  • If capital gains are not available in the current year, the realized losses may be carried back for three years or carried forward to reduce capital gains in upcoming years.
  • The ability to recognize a capital loss may be restricted in certain circumstances, including where the acquired security is the same as or identical to the disposed security. Investors should consult their own tax advisor to ensure that restrictions do not apply.

Tax-loss harvesting example:

    • Realized capital gains from previous transactions or distributions can be offset by selling securities which are trading at a lower price than their tax-adjusted cost base.
    • Investors can then use the proceeds from the disposed security and invest in a different security such as a BMO ETF.
    • Tax-loss harvesting can also be applied to other financial instruments such as bonds, mutual funds, etc.

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BMO Asset Management Inc. offers 55 different exchange traded funds (ETFs) with products that provide a range of exposure including broad markets, asset classes, targeted exposure or strategy specific ETFs, allowing investors to more efficiently execute their tax-loss harvesting strategy. Investors should consult their own tax advisor before executing a tax-loss harvesting strategy.

For questions, please contact:

Client Services: 1-800-361-1392

For a Full List of Tax-Loss Harvesting Ideas please contact:

Kevin Prins
Vice President, Ontario

Daniel Stanley
Vice President, Ontario

Alain Desbiens
Vice President, Quebec & Atlantic

Mark Webster
Vice President, Western Canada

*All prices as of market close November 11, 2013 unless otherwise indicated.


BMO ETFs are managed and administered by BMO Asset Management Inc. an investment fund manager and portfolio manager and separate legal entity from the Bank of Montreal. Commissions, management fees and expenses all may be associated with investments in exchange traded funds. Please read the prospectus before investing. The funds are not guaranteed, their value changes frequently and past performance may not be repeated.

This summary is of general nature only and is not exhaustive of all possible income tax considerations. You should therefore consult your own tax advisors about you individual circumstances.

Information, opinions and statistical data contained in this report were obtained or derived from sources deemed to be reliable, but BMO Asset Management Inc. does not represent that any such information, opinion or statistical data is accurate or complete and they should not be relied upon as such. Particular investments and/or trading strategies should be evaluated relative to each individual's circumstances. Individuals should seek the advice of professionals, as appropriate, regarding any particular investment.

Individuals should seek the advice of professionals, as appropriate, regarding any particular investment. Standard & Poor's® and S&P® are registered trademarks of Standard & Poor's Financial Services LLC ("S&P") and "TSX" is a trademark of Toronto Stock Exchange. These trademarks have been licensed for use by BMO Asset Management Inc. BMO ETFs are not sponsored, endorsed, sold or promoted by S&P or Toronto Stock Exchange, and S&P and Toronto Stock Exchange make no representation, warranty or condition regarding the advisability of buying, selling or holding units in the BMO ETFs.

Nasdaq®, OMX®, NASDAQ OMX®, Nasdaq-100®, and Nasdaq-100 Index®, are registered trademarks of The NASDAQ OMX Group, Inc. (which with its affiliates is referred to as the "Corporations") and are licensed for use by BMO Asset Management Inc. The BMO Nasdaq 100 Equity Hedged to CAD Index ETF has not been passed on by the Corporations as to its legality or suitability and is not issued, endorsed, sold, or promoted by the Corporations. THE CORPORATIONS MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO The BMO Nasdaq 100 Equity Hedged to CAD Index ETF.

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