Cache Long/Short seeks to improve after-tax outcomes, but it comes with real risks.
Market risk: The portfolio remains exposed to equities. If markets decline, the account can lose value.
Leverage and margin risk: Margin creates long and short positions. During market stress, losses can be magnified and margin calls are possible. BKLN seeks to maintain low leverage and diversified positions to reduce this likelihood, but these measures do not eliminate the risk.
Short exposure risk: Short positions can rise unexpectedly. Positions are diversified across hundreds of stocks and managed systematically, but sharp moves can create short-term losses.
Tracking error: Because the portfolio is actively managed for tax outcomes, returns may differ from the benchmark.
Financing costs: Margin interest and stock-borrow costs reduce returns. These vary with market conditions.
Tax and regulatory risk: Changes in tax law could reduce the strategy's effectiveness.
All investments carry risk, including loss of principal. Diversification may help manage risk but does not guarantee profit or protect against loss. Review the Form ADV carefully before investing.