JPMorgan Asset Management is tapping into a booming market for wealthy investors with the launch of a private fund designed to maximize after-tax returns by generating losses.
The J.P. Morgan Tax-Smart Disciplined Equity Long Short Strategy takes bullish positions in a basket of stocks while also betting against certain companies, according to a person familiar with the matter who asked not to be identified discussing private information.
The shorted names will ideally produce losses that the fund can then harvest to offset capital gains.
A spokesperson for JPMorgan Asset Management, which oversees $4.1 trillion, declined to comment.
So-called tax-aware investing is quickly becoming one of the hottest trends in wealth management as the affluent seek to reduce their tax bills.
A long-running bull market in U.S. stocks has left many investors with massive unrealized gains and concentrated positions in specific names.
Taking short positions to create losses which can then be used to offset gains elsewhere in the portfolio should theoretically lower an investor’s tax burden when the time comes to sell appreciated assets.
The strategy was popularized by quant firm AQR Capital Management, which held about $45 billion in such strategies as of Sept. 30, compared with roughly $10 billion a year ago.
Two Sigma Investments debuted a tax-aware hedge fund earlier this year, while WorldQuant is planning a similar venture for early 2026.
The actively managed JPMorgan tax-aware fund holds U.S large- and mid-cap stocks, according to the person.
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