LionShares introduced a new exchange-traded fund on Tuesday to address an ever-present investor pain point: tax drag on dividends.
Cost-sensitive investors are also considered in the pitch. The LionShares U.S. Equity Total Return ETF (NYSE:TOT) has a net expense ratio of 0.0749% following a contractual fee waiver (through September 2026). It aims to beat many actively managed competitors while solving a problem most index funds don’t address head-on.
Traditional equity ETFs distribute dividends to shareholders, generating reinvestment drag and taxable income in the process. TOT is different. It’s designed to retain those cash flows within the fund.
By proactively reducing distributions, the ETF enables returns to compound unimpeded and converts what is often a taxable drip into a smooth growth engine.
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LionShares CEO Sofia Massie said most investors want to reinvest dividends on a timely basis and gain exposure to the market’s total return.
“Often overlooked, tax drag can quietly erode investors' performance compounding for years. We looked to eliminate this obstacle at the foundation of the ETF's design by removing distributions,” she said. “Our goal with this innovation is to provide investors with a more efficient product to achieve their long-term investing objectives and give back control over the timing of taxable income.”
TOT invests mainly in broad U.S. equity market-tracking ETFs. It also has the discretion to use futures or options if doing so enhances efficiency or liquidity.
TOT’s launch underscores a trend: addressing structural inefficiencies embedded in the old way of designing funds. By stealthily eliminating tax drag, TOT can provide long-term investors with a more efficient base on which to compound wealth.
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