Tax-inefficient alternative investments refer to assets that generate ordinary income or capital gains annually, resulting in higher tax liabilities for investors. Some asset classes include:

• High-yield bonds – typically offer higher interest rates and income.
• Real estate investment trusts (REITs) – provide attractive dividend income.
• Master limited partnerships (MLPs) – often distribute significant income to investors.
• Hedge funds – generate short-term capital gains from trading activities.
• Certain commodities – select precious metals or oil can generate taxable gains upon sale or distribution of dividends.

Insurance structures have potential to meaningfully enhance investment returns of high income strategies if structured properly.  legacyROTH IDF/SMA programs include curated funds from nearly all asset classes.