Frec Long short
Tax-aware index investing that leans your way.
Tilt your favorite index towards a factor you want to express, or to balance out your portfolio. Market-like returns with more chances to harvest losses.
Close to the market, with a tilt
Lean toward a view or balance what you already own while still tracking the market.
Advanced strategies, made accessible
$100K minimum, no human advisor required. Some providers still require $1M and an advisor.
Greater tax efficiency built-in
Long and short positions create loss harvesting opportunities in rising and falling markets.
Use cases for long short
Lean in, or even out
Lean into an investment style
Tilt your index toward an investment factor that you favor. The long side leans in, the short side leans away.
Even out what you already own
If your portfolio already leans toward a single factor, leaning toward others can diversify your factor exposure.
And more losses
harvested along the way
Our Russell 1000 long short direct index historically harvested 130-337% of a $1M investment over 10 years. Compared to a classic direct index, that’s 3-10x more losses harvested.
30%
Classic130%
140/40265%
200/100337%
250/150Long short
How it works
You set the direction,
we do the driving
we do the driving
From initial investment to wind-down, here is a step-by-step breakdown of how the strategy works.
Growth
Tilt toward companies that analysts expect to grow faster than the market average.
Explore our factor tilts
Factor tilts let you emphasize investment characteristics like Growth, Value, or Quality.
Not sure where to start? We can help you choose, and you can switch between them anytime.
Leverage options
Exposure that scales with you
Each leverage sets your exposure: how much long, how much short. More exposure means a stronger tilt along with more harvesting capacity. You can switch between them anytime.
Exposure
-40%
Short extextension100%
Core+40%
Long extextensionAvg harvesting capacity
22% in Year 112% annually
Minimum
$100KCash, stocks, ETFs, or a mix
Annual fee0.50%
Financing costs
0.23% post-tax0.38% pre-tax
Tracking error ± 1.52%
Market returns within bounds
Tracking error is how far your return typically lands from the factor-tilted index returns, and can occur in either direction. Think of it as taking a measured step away from the benchmark.
Benefits designed to outweigh fees
All-in fees for each leverage option are well under their harvesting capacity. However, the value of those losses to you depends on your tax rate and capital gains.
See why investors choose Frec Long short
Testimonials may not be representative of the experience of other customers, there is no guarantee of future performance or success, and all are current Frec customers and were not paid for these statements.
Long short simulator
Imagine what long short could do for you
Investment
$1MLeverage140/40
Tax rate37%
CompareIndex ETF
Market 8%Russell 1000Market growth8%
IndexRussell 1000
$2.77MPortfolio value net of fees
$637KAdvantage over Index ETF
$1.31MLosses harvested
Portfolio growthMedian of 10,000 seeded simulations
Median 140/40 + tax savingsIndex ETF
This long short simulator is for illustrative purposes only. It models a hypothetical investment in a long short direct index benchmarked to the Russell 1000, using a one-time investment of $1M amount, a 37% capital gains tax rate, and annual growth of 8%. You can select to change the leverage tier and the comparison benchmark. Results may vary with each use and over time. Results are hypothetical, do not reflect actual investment results, and are not a guarantee of future performance. This tool is not tax advice; consult your own tax advisor about the tax consequences of investing with Frec based on your particular circumstances. The effectiveness of tax-loss harvesting depends on your complete tax and investment profile.
IMPORTANT: The projections or other information generated by the long short simulator regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results.
Unwinding from long short,
step-by-step
Have questions?
Talk to a platform expert.
Leverage with guardrails
Leverage can carry real risk. Here are the protections we built around it.
Licensed humans in the loop
The strategy runs on algorithms, but never unattended. Licensed professionals oversee the trading and step in when a call needs human judgment.
Proactive limits set
Borrowing limits and shorting caps bound your exposure from the start, with a margin buffer built in on top.
Leverage kept in check
We monitor your exposure continuously and aim to unwind gradually if you ever approach your limits.
Backtested under stress
Historical simulations from 2005 to 2025 show zero margin calls, even through market downturns like 2008 and 2020.
Backtests are hypothetical and not a promise about the future. Long short uses margin and shorting, which increases your risk of loss.
Take full control over your portfolio
Manage, transition, and scale your portfolio on your own. No human advisor required.
Adjust your leverage when you want, with insight into any potential tax impact before you make the change.
Go deeper on long short
Not sure which Frec strategy is right for you?
Compare Classic, Long short, & Diversify
Read our blog
