NinePointTwo Capital

NinePointTwo Prism

The Strategy

Our core tax-aware strategy

Prism is NinePointTwo's proprietary tax-aware long/short equity strategy.

It applies our quantitative engine in distinct configurations, each tuned to a different investor need. Every configuration draws on the same long/short models that underpin our tax-agnostic equity strategies, with a specific focus on systematic tax efficiency and client-level customization. Each implementation is tailored to your portfolio, your tax circumstances, and your objectives.

Our tax-aware long/short strategy is managed directly by the firm. You work with the investors who build the models and run the book, not an intermediary, and there is no second layer of advisory fees.

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Working with us directly, or through an advisorHow Prism compares with 351 conversions and exchange funds

How It Works

NinePointTwo Prism · Tax-Aware Long/Short
A winning portfolio creates a tax problem.
Appreciated holdings carry embedded gains. Diversifying, raising cash, or exiting a position means realizing them.
Embedded gains
Conventional harvesting waits for declines.
A long-only portfolio generally needs holdings to fall before there is a loss to harvest. In rising markets, the opportunity dries up.
No declines, nothing to harvest
Prism invests both long and short.
Systematic long and short extensions are added around existing holdings. The extensions offset each other, so they add no additional market risk.
Market-neutral extensions
More dollars working, same market exposure.
A hypothetical $100 portfolio adds $50 of long and $50 of short extensions. Net market exposure is unchanged, while gross exposure, the dollars actively positioned, doubles to $200.
First, it seeks pre-tax alpha.
Long the names our models favor, short or underweight the names they do not. The strategy seeks returns above its benchmark while active risk stays inside a set tracking-error band.
Seeks pre-tax alpha
Second, it harvests losses in both rising and falling markets.
Winners can be held and their gains deferred. Some positions will show losses whether markets rise or fall, and the strategy seeks to realize those systematically.
Harvested losses, rising or falling markets
Those losses may offset capital gains from any source.
A business sale, carried interest, real estate, appreciated stock. Realized losses may be applied against capital gains wherever they arise.
What Prism seeks to deliver.
Three objectives, one portfolio.

01

Benchmark return

Managed to stay inside a set tracking-error band around the benchmark.

02

Pre-tax alpha potential

Long the names our models favor, short the names they do not, seeking returns above the benchmark.

03

Tax benefits

Realized losses may offset capital gains from any source, helping diversify holdings or defer capital gains taxes outside the strategy.

NINEPOINTTWO Prism

One tax-aware long/short engine, refracted into three approaches.

ninepointtwo.com/prism

Investing involves substantial risk, including the possible loss of principal. Tax-aware long/short strategies involve unique risks and may not be suitable for all investors. The effectiveness of tax management strategies depends on individual taxpayer circumstances and may vary. See our full disclosures at ninepointtwo.com/disclosures.

Direct Indexing

The natural evolution of direct indexing

Direct indexing harvests losses by selling positions that decline. The approach generally works well in its early years. However, as positions appreciate, harvestable losses become scarce and loss generation tapers.

For investors looking beyond direct indexing, our tax-aware long/short strategy may be the logical next step. The strategy holds both long and short positions, meaning it can realize losses in both rising and falling markets. Appreciated holdings from an existing direct indexing portfolio may remain in place while the long/short book seeks pre-tax alpha and harvests losses. Our research primer on tax-aware long/short covers these mechanics in detail.

Read the primer

The Approaches

Three ways to apply tax-aware long/short Prism

The full strategy, at its full potential

Prism Max

Prism Max runs our tax-aware long/short strategy at its fullest expression. It seeks to harvest meaningful tax losses while pursuing potential alpha from our long/short equity models, with the goal of improving long-term after-tax wealth.

  • Seeks to harvest tax losses in both rising and falling markets
  • Pursues potential alpha from the combined long/short book
  • Built for investors without an existing tax-loss-harvesting program
  • Calibrated to your gains and your time horizon

Best for

Investors with large anticipated capital gains or a liquidity event this year or in coming years, and those who do not already run a tax-loss-harvesting program.

Move out of a concentrated position, tax-efficiently

Prism Diversify

Prism Diversify uses the tax-aware long/short engine to help unwind concentrated, low-basis single-stock exposure over time. It seeks to broaden your portfolio while managing the tax drag of realizing embedded gains, with the potential for additional alpha along the way.

  • Designed for concentrated, low-basis single-stock positions
  • Seeks tax-efficient diversification without a forced, all-at-once sale
  • Suited to long-held appreciated stock and founder or early-employee equity
  • Carries the potential for additional alpha as the position transitions

Best for

Holders of a single stock at a large embedded gain, including founders and early employees, who want to diversify tax-efficiently rather than sell all at once.

An overlay on the portfolio you already hold

Prism Enhance

Prism Enhance overlays our long/short equity strategy on top of an existing portfolio, with variable tracking-error levels and benchmarks. It is built for investors who do not want to overhaul their holdings but want to optimize them tax-efficiently and add an uncorrelated return stream.

  • Overlays on your existing portfolio with no wholesale restructuring
  • Variable tracking-error levels and custom benchmarks, tuned to you
  • Seeks to add an uncorrelated return stream
  • Aims to potentially enhance the portfolio's risk and return characteristics

Best for

Investors who want to keep their current portfolio largely intact while optimizing it tax-efficiently and adding a diversifying, uncorrelated overlay.

Get in Touch

Request a meeting

Tell us which approach interests you and we will follow up to arrange a conversation.

Investing involves substantial risk, including the possible loss of principal. Tax-aware long/short strategies involve unique risks and may not be suitable for all investors. The effectiveness of tax management strategies depends on individual taxpayer circumstances and may vary. Past performance is not indicative of future results. See our Disclosures page for additional important information.