Stay fully invested while creating tax advantages your clients can use today
Your clients with concentrated or low-basis positions need solutions that maintain market exposure while creating tax advantages.
Our 130-30 long-short strategy offers a sophisticated approach that combines full market participation with continuous tax-loss harvesting opportunities, powered by individual equities and our proprietary BRNY ETF implementation. This unique structure allows clients to stay invested while generating valuable tax losses in most market environments.
Visit burneyetfs.com to learn more about our BRNY ETF.
Generate tax advantages while maintaining market exposure
Many traditional buy-and-hold strategies leave advisors without tax-loss harvesting opportunities in rising markets.
Our 130-30 long-short strategy solves this challenge by using a sophisticated approach: 130% long exposure through our BRNY ETF combined with 30% short exposure to low rated stocks in our proprietary equity ratings model. This structure maintains 100% net market exposure while creating regular tax-loss harvesting opportunities from the short positions - even in up markets.
Meanwhile, our proprietary stock selection model seeks to enhance returns by identifying both outperforming and underperforming stocks, adding potential alpha on top of the tax advantages.
Transform client tax management with strategic implementation
Our unique approach combines tax-deferred growth through BRNY ETF with regular tax losses from short positions, helping you:
- Get concentrated positions off the sidelines
- Generate ongoing tax losses for portfolio management
- Maintain tax efficiency with potential step-up basis
A powerful solution for tax-efficient portfolio transitions while staying invested.
Start unlocking tax advantages for your clients
Learn how our 130-30 strategy can help transition low-basis positions and enhance after-tax returns:
- Meet: Together, let’s discuss your goals, challenges, and what makes your practice unique to find out how the 130-30 Strategy can benefit your clients.
- Evaluate: Review our track record and discuss how the strategy fits your clients' needs
- Implement: We'll guide you through account setup and strategy integration
Important Disclosures
We execute this strategy at two custodian firms: Interactive Brokers and Schwab. Both custodians offer competitive margin rates vs other custodians. Clients seeking to utilize this strategy will need to sign a margin agreement with the custodian firm.
The primary risks associated with this strategy include the following:
- Unlimited risk of loss from short selling. Unlike long positions, where losses are limited to the initial investment, the price of a stock sold short can rise indefinitely, potentially causing rapid and unlimited losses. The Burney Company employs various measures to reduce this risk, but losses can still occur.
- Leverage and margin risk. Long-short strategies use margin to boost exposure, increasing both potential gains and losses. A decline in stock value can trigger margin calls.
- Tracking error and portfolio risk. There is potential for tracking error due to the performance of our stock selection model. Success depends on the portfolio manager’s ability to choose both winning longs and losing shorts. Poor timing or incorrect analysis can lead to losses on either side. Additionally, in volatile market conditions, the assumed hedge between long and short positions may break down, leaving the portfolio vulnerable to broad market downturns.
- Costs and tax implications. This portfolio incurs additional expenses, including margin charges, as detailed in the margin agreement. Additionally, closing out positions can lead to significant short-term capital gains tax liabilities that may not be fully offset.
- Liquidity risks. Some short positions may become difficult to borrow or cover, particularly in volatile markets, making unwinding difficult.
The strategy is intended for sophisticated investors with aggressive or moderately aggressive risk tolerances who understand the strategy's complexity and the unlimited loss potential of short selling.
Past performance is not indicative of future results. All investments involve risk, including loss of principal.
Although we do not directly take a management fee from accounts invested in this strategy, our ETF incurs a 0.79% management fee paid to us. This fee is increased by the 130% allocation on the long side. The ETF fees are separate from the management fees paid by Burney Clients to The Burney Company. To prevent double-billing, the ETF fee will be offset by the management fee. If the management fee exceeds the ETF fee, the difference may be charged to clients as an advisory fee. If the ETF fee is equal to or higher than the management fee, no management fee will be charged on ETF assets. For example, if your Burney management fee is 1%, the 0.79% ETF management fee will be offset, so that you will pay us only 0.21% in advice fees.
Advisory services are offered through the Burney Company, an investment adviser registered with the U.S. Securities & Exchange Commission. Registration as an investment Adviser does not imply a certain level of skill or training.