The Compoundr™ Strategy
It's like an IRA for your taxable account
What We Do
One of the biggest challenges in fixed income investing is that the majority of return comes in the form of interest income or if buying through an ETF, non-qualified dividends - both taxed at the investor's highest marginal rate. This significantly erodes after-tax returns, leaving investors with far less than they earn. In fixed income, it's not just about what you earn - it's about what you keep. That's where the Compoundr™ strategy comes in.
What makes this strategy stand out?
No Distributions. By skipping the dividend, the strategy avoids income that would otherwise be passed through to investors.
Built-in Reinvestment. Without distributions, the strategy remains fully invested, allowing the value of compounding to work uninterrupted over time.
Smart Tax Moves. By swapping between similar ETFs, a manager can defer gains or realize losses using proven ETF mechanics to defer capital gains.
Simple, Tax-Friendly Yield Exposure. This approach delivers access to income-producing markets without the usual tax baggage or complexity - a streamlined solution for tax-aware investors.
How It Works
Timing is everything - like a relay race. Think of the Compoundr™ strategy as a smooth baton pass:
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The Race is Off!
The fund starts with Core ETF A as the lead runner.
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The Baton is Passed
Just before the ex-dividend date - when the dividend is priced in but not yet paid - it hands off to a closely matched Substitute ETF B.
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The Home Stretch
Once the dividend has been paid, the baton is passed back to Core ETF A, keeping the fund on track with total return, while deferring taxable income along the way.
It's not about racing ahead - it's about precision, timing, and maximizing efficiency every step of the way.
