Return Enhancement Strategies

HARVESTING WORKS
Loss harvesting means selling securities to realize a loss for tax purposes. TOS Advisors may apply this strategy when you have realized investment gains, thus offsetting some or all of your gains and avoiding out-of-pocket tax-liability expenses. Conversely, we harvest gains when your portfolio has realized losses. This allows you to reap the full tax benefit of any previously incurred loss.

TAXES ARE INEVITABLE (AND CONTROLLABLE)
Think about these numbers: The SEC estimates that, each year, the average stock fund loses 2.5% of its total return to taxes. Specifically, losses ranged from zero in the case of very efficiently managed funds to as high as 5.6% for the least efficient funds. Over time, the numbers are even more staggering. Over a recent five-year period, investors in diversified public funds were reported to have lost an average of 15% of their annual gains to taxes. By contrast, the TOS platform helps you control certain taxable events and protect more of the return you’ve earned.

MAKING EROSION WORK FOR YOU
Our most straightforward strategy collects option premium by selling limited risk vertical spreads. Using probability models to estimate ranges of index performance, TOS Advisors finds trading opportunities that have, based on our research, a 75% probability of enhancing your portfolio’s yield by approximately 20 basis points per month, or 2.5% per year. This lets you maintain unlimited upside performance while receiving the benefits of premium erosion. Our research has shown that diversified indexes typically fluctuate less than 6% in either direction from one option expiration to the next. With that in mind, we regularly sell vertical spreads outside that 6% range. When successful, this credit becomes a yield enhancement.

Any of these strategies can be easily used with our index portfolios.