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Implement · routes

Through what wrapper, at what cost and tax?

The same strategy can be held through several wrappers. Each route carries its own cost layers, tax character, account fit and constraints. This is the map; which road a household takes is its own decision.

Route Cost layers, bps a year
expense · advisory · spread and turnover · financing		 Tax treatment Account fit Access Tracking risk Behavior risk
Broad-market index ETF
ETF		 3 · — · 3 · —
6 bps all-in		 In-kind, deferred Taxable, IRA, Roth, HSA, 401(k) Minimum $1 Low Low
Actively managed equity mutual fund
Mutual fund		 64 · — · 20 · —
84 bps all-in		 Mixed Taxable, IRA, Roth, HSA, 401(k) Minimum $1,000 Medium Low
Direct indexing (separately managed account)
SMA, direct indexing		 — · 9 · 10 · —
19 bps all-in		 Mixed Taxable Minimum $5,000 Medium Medium
Equity index futures
Futures		 — · — · 6 · 35
41 bps all-in		 Section 1256, 60/40 Taxable, IRA Minimum $38,000 Low High
Covered-call and option-income ETF
Options overlay		 55 · — · 10 · —
65 bps all-in		 Mixed Taxable, IRA, Roth, HSA, 401(k) Minimum $1 High Medium
Interval fund
Interval fund		 152 · — · — · 175
327 bps all-in		 Mixed Taxable, IRA, Roth Minimum $2,500 High High

Basis points a year. A dash means the layer does not apply or the filing does not state it. Every figure's source is on the route's page. Names of funds, where they appear, are mechanism examples, not recommendations.

Each route

The seven columns, one page each

The strategies they carry

  1. Broad-market index ETF

    One share buys the whole index. In-kind redemptions keep gains from being distributed, so the ongoing cost is a few basis points and a thin bid-ask spread.

    4 sources

  2. Actively managed equity mutual fund

    The average actively managed equity fund charges 64 basis points and loses about 1.2 points a year more than an ETF to tax on distributions.

    3 sources

  3. Direct indexing (separately managed account)

    The same loss-harvesting logic costs 9 basis points bought direct and about 115 all-in through an adviser, TAMP, and platform stack.

    6 sources

  4. Equity index futures

    One contract replaces a stock position with borrowed exposure: 60/40 tax treatment by law and a financing spread over the T-bill rate instead of a fund fee.

    6 sources

  5. Covered-call and option-income ETF

    Selling calls against an index turns some upside into a monthly payout; the fee runs 35 to 68 basis points and tax character depends on the instrument.

    5 sources

  6. Interval fund

    A registered fund that repurchases only 5% to 25% of shares each quarter; one credit fund runs 152 basis points of expense plus 175 of borrowing cost.

    4 sources