Smart Yield

Product Introduction

1. Smart Yield is an automated cash management product that allocates funds to curated money market funds targeting tax-efficient yields. It functions as an alternative to traditional high-yield savings accounts by investing in U.S. Treasury securities, government bonds, and municipal bonds to optimize after-tax returns. The system dynamically selects funds based on the user’s tax profile, including income level, state of residence, and filing status.
2. The core value lies in maximizing post-tax returns through algorithmic allocation to tax-advantaged money market funds. It eliminates manual comparison of savings account rates and tax implications by automating fund selection based on real-time yield data and personalized tax calculations.

Main Features

1. Automated tax-equivalent yield optimization evaluates money market funds daily and allocates cash to the option with the highest potential after-tax return. The algorithm factors in federal, state, and local tax exemptions specific to treasury, agency, and municipal bond funds.
2. Tax-exempt income potential is achieved through municipal bond funds (federal tax exemption) and U.S. Treasury funds (state/local tax exemptions), with eligibility determined by residency and income brackets. The system automatically applies IRS-compliant calculations for California, New York, and other states requiring >50% state-specific holdings.
3. Liquidity with T+2 settlement enables withdrawals within 4-7 business days via brokerage account redemption. Funds are held in short-term, high-quality assets like repurchase agreements and commercial paper to maintain liquidity while preserving capital.

Problems Solved

1. Traditional savings accounts and taxable money market funds deliver suboptimal returns due to federal/state income taxes on interest earnings. Smart Yield solves this by prioritizing funds with tax-exempt status aligned with the user’s jurisdiction and marginal tax rate.
2. The product targets high-income earners in states with income taxes (e.g., New York, California) and self-employed individuals seeking passive cash management. It also serves retirement account holders through tax-agnostic pre-tax yield optimization.
3. Typical use cases include parking emergency funds, short-term savings for business expenses, or idle cash in IRAs/Solo 401(k)s while earning competitive yields. It replaces manual fund selection and tax calculations required for treasury-direct or municipal bond laddering.

Unique Advantages

1. Unlike robo-advisors or bank savings products, Smart Yield combines SEC-registered fund curation (Vanguard, Schwab) with real-time tax-bracket optimization. Competitors like Wealthfront Cash or Betterment offer taxable accounts without state-specific exemption analysis.
2. Proprietary algorithms adjust allocations during market hours based on 7-Day SEC Yield fluctuations and changes to the user’s tax inputs. The system bypasses funds with investment minimums exceeding the user’s balance, ensuring accessibility for small accounts.
3. Integration with retirement accounts provides differentiated optimization: IRAs/Solo 401(k)s receive pre-tax yield prioritization, while taxable accounts use tax-equivalent yield formulas. Competitors lack this bifurcation, applying uniform strategies across account types.

Frequently Asked Questions (FAQ)

1. What fees does Smart Yield charge? Carry Advisors imposes a 0.20% annual advisory fee deducted monthly from assets under management. Underlying money market funds charge expense ratios (e.g., VMFXX: 0.11%), which are netted from fund yields before display.
2. How quickly can I withdraw funds? Redemptions require 1-2 days for trade settlement and 3-5 days for bank transfer, totaling 4-7 business days. This exceeds traditional savings accounts but matches standard brokerage liquidity for money market funds.
3. Is there a minimum investment? The platform requires $1 to start, but underlying funds like VMSXX mandate $3,000 minimums. The algorithm allocates to the highest-yielding eligible fund based on the user’s balance, defaulting to lower-minimum options if necessary.