Why choose this strategy?
- Ability to recharge aged long-only direct indexing portfolio
- Manage risk exposures and tax liabilities on legacy assets
- Diversify concentrated positions in a tax-efficient manner
Investment strategy
- Long/short extensions employ both long and short equity positions to achieve exposure to an equity benchmark.
- Aims to track or outperform a benchmark or an index on a before-tax and after-tax basis by generating net realized losses and deferring capital gains where possible.
- The short component of a long/short extension can be a source of negatively correlated equity market returns and provides additional funds. In normal upward market performance, the short book can generate losses.
- Investors can build customized solutions that track various benchmarks, target specific leverage and tracking-error goals along with incorporating tax objectives.
