Frec news
Frec launches S&P 500 Long short, 200/100 Diversify, and more
2 min read
As of today, you can invest in a Long short or Diversify strategy benchmarked against the S&P 500. We’ve also added a 200/100 Diversify so that you can unwind out of concentrated positions more quickly, and enabled borrowing against all of the Long short and Diversify strategies.
S&P 500 Long short & Diversify
Since launching Long short, one of the most common requests has been the ability to invest using the S&P 500 as a benchmark. The S&P 500 can be selected during setup for any Long short or Diversify strategy. You can learn more on the invest page or read more about our Long short and Diversify strategies in our white papers.
200/100 Diversify
You can now diversify more quickly with 200/100 Diversify, which uses higher leverage overlays. Just like 140/40, you bring us your concentrated stock, and we’ll construct a portfolio around it. This reduces concentration risk on day one and then begins harvesting tax losses to offset gains as we reduce your concentrated position. Based on our historical simulation, a customer with a 50% cost basis could be diversified in as little as ~1.2 years, compared with ~3 to 5 years for our original 140/40 product.
The investment minimum for 200/100 Frec Diversify is $500,000 which can be a mix of your concentrated position, cash and other stocks. It carries an annual fee of 1.10% plus 0.57% post-tax financing costs.
Portfolio line of credit against Long short and Diversify
And lastly, you can borrow against Long short and Diversify. To do this, you’ll need to be approved for a portfolio margin account and have at least $500,000 in assets on Frec. If you are an existing customer, you can upgrade directly in the app. New customers can apply during signup.
Once approved, you’ll be able to borrow up to 35.72% against a 140/40, 18.80% against a 200/100, and 4.70% against a 250/1501. You can increase borrowing power by keeping additional marginable assets in your self-managed account or invested in classic indices on Frec.
Get started
These updates come on the heels of Frec adding 7 US classic indices, bringing the total index options for our classic direct index to 22, with more coming soon.
Everything is available on Frec for self-serve onboarding within your account. If you’re new to Frec, creating an account takes a few minutes.
Want a walkthrough? Book a demo or reach out to us at help@frec.com.
The Long short and Diversify strategies involve a higher level of risk than traditional long-only investing, including the use of portfolio margin and leverage. Borrowing against these strategies amplifies both potential gains and losses and may result in losses exceeding your initial investment.
