Don’t compare this to an index fund. The relevant comparison is ongoing costs versus avoided taxes.
If you sell a highly appreciated position outright, you may owe 30%+ in combined taxes immediately. That’s a permanent reduction in invested capital. Cache Long/Short at 130/30 has annual management fees of approximately 0.50% plus financing costs.
Cache Long/Short's costs consist of an annual management fee and annual financing costs necessary to execute the strategy — as an example, 130/30 has a 0.50% management fee and an estimated 0.17% financing fee (post-tax). Higher-leverage extensions have higher fees.
Visit our Concentrated Stock Calculator to see the impact (net of any fees) of selling and incurring capital gains taxes upfront vs. using Cache Long/Short or Cache Exchange Fund.