Tax Considerations & Sell Discipline

Atom focuses on after tax returns for its clients, thus tax is a consideration with regard to all portfolios and particularly with regard to our sell discipline. Historically funds management has often measured itself on pre-tax returns alone. Two fund managers with similar pre-tax returns (one a trader, one a long term investor) can have vastly different post-tax returns.

Atom's focus on investment selection, risk constraints, tax considerations and portfolio construction combine to force a sell discipline.  Cheap investments become expensive investments when their price rises relative to the overall market. The relative attractiveness of this investment must correspondingly fall and this is highlighted within Atom's stock ranking screens.

Atom is repeatedly encouraged by its systems, subject to valuation targets and tax considerations, to begin the sell down process when an investment rises in price by its:

• Rising absolute and relative position within the portfolio, and
• Falling attractiveness within stock ranking screens.

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