Strategy-Only Investments
Focused tactics for specific investment goals
For clients who need help in targeted areas, such as managing concentrated stocks or generating income, our Strategy-Only approach provides a flexible option.
Strategy spotlight: long/short SMAs
Our Strategy-Only approach provides access to long/short separately managed accounts, which can be used to address goals like diversification, tax efficiency, risk management, and more.
This approach blends long-only equity positions with short equity positions, allowing investors to express both bullish and bearish views while creating the potential for tax efficiency.
Understanding the strategy
Long/short SMAs can be useful for clients who want to tax-efficiently transition a concentrated stock position into a more diversified strategy or who have significant embedded unrealized gains. Here’s a basic illustration of how this strategy is structured.
Long side: buy stocks expected to outperform.
Short side: borrow and sell stocks expected to underperform and decrease in value.
Strategy types
Depending on their situation, clients can choose from three distinct strategy types:
Provides enhanced core equity exposure, risk reduction, and consistent tax benefit.
Manager is only responsible for long and short extensions. Core holdings are untouched.
Designed to help investors tax-neutrally diversify concentrated positions over time.
Assessing client fit
Here’s how you can identify clients who might benefit from the use of long/short SMAs.
Questions to ask
What is your tax reduction strategy?
How do you feel about single-stock risk?
How do taxes influence your selling decisions?
How do you evaluate new investment strategies?
Do you have a reinvestment process?
Target investors who:
Have concentrated position(s)
Are seeking tax benefits
Want more out of direct indexing
Suggest a meeting
Submit a referral and we will be happy to meet with you and your client to explore next steps. We will talk to the client about their needs and goals to identify the right strategy for them.
Learn More
Ready to take a deeper dive into this strategy?
Here are some educational resources for financial professional use.
Questions to ask clients
Summary of strategy types, client profiles
Examples of strategy uses
High-level strategy explanation
Detailed strategy explanation
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