List of Tax-Aware Long/Short Providers

Tax inefficiency can be a drag on long-term wealth. Whether you're looking to diversify a concentrated stock position, transition an appreciated legacy portfolio, offset gains from a business sale or real estate exit, or simply rebalance without a large upfront tax bill, the core problem is the same: the tax cost stands between where your portfolio is and where you want it to be.

A tax-aware long/short strategy is designed to help close that gap. It runs a long/short equity overlay alongside your core holdings, designed to systematically harvest capital losses that can offset realized gains elsewhere in your portfolio or financial life.

Several firms now offer variations of this strategy. In our opinion, the differences that matter the most are: investment structure (brokerage account vs. limited partnership), custodian, whether direct access is available, all-in cost, and live track record. This article compares the major providers across those dimensions.

👉 See your after-tax projection with long/short

At a glance: cost and access

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Cache / Brooklyn Investment Group (BKLN)

Cache partners with Brooklyn Investment Group (BKLN), an SEC-registered investment adviser, to offer tax-aware long/short as part of a broader platform for managing large stock positions. BKLN handles portfolio construction and tax-aware execution. Charles Schwab serves as custodian, with your assets held in your name in a separately managed account (SMA).

Cache offers direct access. Investors can enroll through Cache's online portal.

The strategy is built on BKLN's actively managed, multi-factor alpha model. Rather than passively tracking an index and harvesting losses on the side, the strategy seeks pre-tax excess returns from active stock selection, with tax-aware implementation layered on top. A wide range of index benchmarks and extension levels are available. The core portfolio tracks your chosen target allocation, and investment restrictions carry through to the extensions. You can fund with cash, a single concentrated stock, baskets of stocks, ETFs, or mutual funds.

Annual advisory fees range from 0.50% to 1.25%, financing costs typically range from 0.27% to 1.43%, depending on configuration. Fees are assessed on actual leverage deployed and decrease proportionally as the strategy deleverages over time. There are no sales loads or performance fees.

AQR

AQR Capital Management, founded in 1998, is one of the largest providers of tax-aware long/short strategies. Their offering, AQR Flex (Flex SMA), is a long/short equity SMA designed to generate both pre-tax alpha and tax benefits. As of December 31, 2025, AQR reported approximately $68.8 billion across all tax-aware strategies.

AQR Flex is available through financial advisors (RIA or wirehouse) and does not currently offer direct-to-consumer enrollment. Fees are not publicly disclosed and an advisor fee is typically layered on top.

The strategy is rooted in systematic, factor-based investing. AQR uses long and short positions to implement active stock selection views, generating losses primarily through deferring capital gains rather than just harvesting decliners. AQR has stated publicly that pre-tax alpha should cover strategy costs before the tax benefit is counted.

AQR Flex can be funded with cash or transitioned from an existing portfolio. Customization options include benchmark selection, sector constraints, and ESG screening. The firm offers a Transition Analysis Tool at flex.aqr.com. AQR maintains live GIPS composites and has published peer-reviewed research on tax-aware long/short mechanics. Contact AQR for composite data or visit their website for more info.

Quantinno

Quantinno Capital Management specializes in tax-aware long/short strategies through managed accounts. As of March 31, 2026, the firm reported managing over $48.4 billion in assets across more than 10,600 accounts. Quantinno is available through financial advisors and does not currently offer direct-to-consumer enrollment.

Quantinno's platform is called DEALS (Direct Equity and Long/Short) and includes three strategies: DEALS Core builds tax-efficient core equity portfolios using a long/short extension, designed to recharge tax benefits when long-only harvesting has become exhausted. DEALS Exchange systematically transitions concentrated positions into diversified portfolios in a tax-efficient manner. DEALS Overlay introduces a long/short overlay on top of existing holdings to generate tax benefits.

Fees are not publicly disclosed. An advisor fee is typically charged on top. The standard minimum is $1M or more.

Quantinno has operated live accounts since 2021. Contact Quantinno for current performance data.

👉 Compare long/short against your other options

Aperio (BlackRock)

Aperio Group is a wholly-owned subsidiary of BlackRock (acquired in 2021) with approximately 25 years of experience in tax-managed direct indexing and roughly $110 billion in equity assets across all tax-managed accounts. Their long/short strategy, launched in January 2023, extends that direct indexing expertise with short positions for enhanced harvesting.

Aperio is available through financial advisors and does not currently offer direct-to-consumer enrollment. The firm offers several long/short SMA strategies, including the Long/Short SMA, the US Large Cap 130-30 Quality Value Strategy (composite inception September 2022, published management fee of 0.55%), and the Long/Short Tax-Managed Dynamic Factor Strategy (TDYF). Aperio's ESG screens, exclusion lists, and factor tilts carry through to all overlays.

Fees vary by strategy and leverage level, with a tiered structure based on gross exposure. Rates are negotiable. Additional costs include margin interest, stock borrow fees, and regulatory charges, with an advisor fee typically layered on top. Accounts are available at Fidelity and Schwab. BlackRock's SMA page notes a $1 million minimum for certain strategies.

Aperio constructs portfolios of individual stocks tracking a target benchmark, using MSCI Barra optimization and risk models. According to BlackRock, Aperio harvested approximately $3 billion in losses across all tax-managed accounts in 2025. These figures reflect gross tax losses across all Aperio accounts (long-only and long/short combined) and do not represent net client returns or guarantee any particular tax outcome.

Aperio has also published research on using long/short strategies for concentrated stock diversification. Contact Aperio for current performance data.

Frec

Frec is a San Francisco-based fintech founded in 2021. Like Cache, Frec offers direct-to-consumer access to long/short strategies. As of March 2026, Frec reported roughly $567M in assets across its managed accounts.

Both advisory fees and financing costs scale with leverage. All-in costs range from roughly 1.00% at the 140/40 level to roughly 2.73% at 250/150. Frec also offers a "Diversify" product for concentrated stock positions, priced at 0.60% + financing costs. The minimum is $100,000 at 140/40, increasing to $500,000 at higher leverage tiers.

Frec uses Apex Clearing Corporation as its exclusive custodian. Apex is a clearing broker, SEC-registered broker-dealer, and FINRA and SIPC member. Apex's lending is funded substantially through external credit facilities.

The algorithmic portfolio construction strategy uses MSCI Barra risk models with daily evaluation for tax-loss harvesting, targeting tracking error below 1%. The investor selects a single factor tilt (growth, value, or quality), and the portfolio is constructed algorithmically. Benchmark options available are the Russell 1000 and S&P 500 Indexes.

Frec began onboarding long/short customers in late 2025. Published performance data prior to that is based on backtested simulations. Contact Frec for the latest on live performance history.

How to choose a long/short provider

A tax-aware long/short strategy is a meaningful commitment. The fees are higher than a passive index fund, the mechanics are more complex, and the benefit depends heavily on your specific tax situation. Before selecting a provider, it's worth thinking through a few questions.

Structure and scale at a glance

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What structure will you hold? Most providers use a separately managed account (SMA), where you own individual securities in your name. Some offer a fund structure, either a private placement limited partnership offered to only accredited investors or qualified purchasers, or a mutual fund structure. The SMA structure gives you direct ownership and 1099 tax reporting. The LP structure reports via K-1 and may have different liquidity terms.

Who custodies your assets? The custodian holds your securities and cash. Providers use different custodial platforms, and the custodian's stability to act as a lender can affect your experience.

Do you want direct access? Cache and Frec offer direct-to-consumer enrollment. AQR, Quantinno, and Aperio are accessible only through financial advisors or wirehouses. If you already work with an advisor, ask whether they have access to the provider you're considering.

What are the all-in costs? Management fees are only one component. Financing costs (the cost of borrowing for the short positions) and any advisor markup on top of the strategy fee can significantly affect your net benefit. Ask each provider for a full fee breakdown before committing.

How much live performance data exists? Some providers have maintained live accounts for years. Others rely on backtested simulations. Understanding which is which matters.

How is Cache different?

Cache partners with Brooklyn Investment Group (BKLN) to offer tax-aware long/short as part of a broader platform designed for investors with concentrated stock positions. Here's what distinguishes the offering:

• Direct access. You can enroll directly through Cache's online portal. Advisors can also allocate through Cache's advisor platform.
• Charles Schwab custody. Your assets are held at Schwab, a federally chartered bank and self-clearing broker-dealer, with $12T in assets and hundreds of billions in lending capacity.
• Flexible funding and targets. You can fund with cash, a single concentrated stock, baskets of stocks, ETFs, or mutual funds. You can also target a mix of indices in your account and choose different loss-harvesting intensities.
• Transparent pricing. Both advisory fees (0.50% to 1.25%) and financing costs (0.27% to 1.43%) scale with leverage level. There are no sales loads, performance fees, or servicing fees.
• Part of a broader platform. Cache also offers exchange funds and collar advance financing, so you can evaluate multiple strategies for the same position in one place.

If you'd like to see what a long/short strategy could look like for your specific situation, Cache offers three free tools to help you size the opportunity:

👉 Concentrated Stock Calculator — compare your diversification options side by side

👉 Long/Short Simulator — see your after-tax projection with long/short

👉 Capital Gains Tax Calculator — see your combined federal and state rate

Or, if you're ready to talk, tell us about your situation and we'll walk you through the details.