CHOICE Enhanced Equity Portfolio
The Enhanced Equity portfolio is designed for investors looking for less volatile investment returns, while managing investment risk through the use of covered calls to generate incremental cash flow. This portfolio includes stocks from the other three CHOICE portfolios with an increased emphasis on positive technical trends. The managers then search for attractive call premiums typically expiring in 60 to 180 days, almost exclusively “out-of-the-money” in order to leave room for targeted price appreciation.

In essence, our call-writing strategy involves a calculated series of low-return but high-probability investments. (A cash return up front is assured in exchange for an obligation to deliver the stock if the stock advances beyond the strike price.) The call-buyer(s) on the other side of our transactions are making a series of low-probability but potentially high-return investments on each stock. Over time, we believe the option premiums we are able to generate may “enhance” our underlying equity performance, while reducing overall volatility. Turnover is likely to be higher, however, than the other CHOICE portfolios.

We benchmark this portfolio's performance against the Chicago Board Options Exchange ("CBOE") Buy-Write Index ("BXM"), which assumes “at-the-money” call writing monthly against the S&P 500 Index. This alternative “cookie-cutter” approach has been adopted by competing investment vehicles to use the volatility reduction inherent in a covered call portfolio. We believe our focus on first selecting stocks and our opportunistic approach to call writing increases the probability of positive returns.

The Enhanced Equity Portfolio carries a higher minimum investment of $250,000.

Performance results reflect the total return of a composite of all Enhanced Equity separately managed accounts. Such returns are before management fees and will fluctuate so that an investment may be worth more or less than its original cost. Current performance may be lower or higher than the performance data quoted. Yields will vary. Past performance does not guarantee future results.

It is not possible to invest directly in an index.

CHOICE Asset Management View of the Current Market