New Leverage Choices
Frec offers 250/150 and 200/100
Disclaimer / Disclosure long Frec
2026
Frec enters the new year with continued growth and more ways for investors to manage portfolios with greater control and tax efficiency. They’re approaching $700 million in customer assets, quadrupling assets from last year, and launching two highly requested products: tax-efficient diversification of concentrated stocks and higher leverage choices for their long short direct index.
Frec Diversify
Investors who are heavily concentrated in a stock, often from company equity or years of appreciation, and wish to diversify may be faced with a large tax bill. Frec Diversify offers another path. You bring concentrated stock, and they build a portfolio that mimics a broad market index using long and short overlays. The overlays immediately reduce your concentration risk while systematically harvesting tax losses. Over time, this framework accumulates losses to offset gains as they gradually sell down concentrated stock, helping you diversify while minimizing your tax impact. The investment minimum for Frec Diversify is $100,000 and carries an annual fee of 0.60% plus 0.30% post-tax financing costs.
Leverage Choices
Since launching their 140/40 long short direct index, one of the most frequent requests has been greater leverage flexibility to further amplify market returns and tax savings. Now, investors can choose from:
140/40 with a value, quality, or growth tilt
200/100 with a quality or growth tilt
250/150 with a quality or growth tilt
These new options enable investors to increase return potential while expanding tax-loss harvesting capacity. According to historical simulations, a 250/150 direct index tilted towards quality can produce 8.49% in after-tax excess return, and harvest up to 337% of the initial investment over 10 years. Minimum investment for 200/100 and 250/150 long short strategies is $500k, and annual fees range from 1.00%-1.30%, plus 0.57%-0.86% in post-tax financing costs.
Start Now
Frec Diversify and higher leverage long short are both available on Frec for self-serve onboarding. Existing customers can get started by navigating to the Invest tab. For those not on Frec yet, creating an account takes a few minutes. If you have questions or need assistance getting started, reach out at help@frec.com.
Caveats
Greater leverage increases tracking error. I don’t mind if it is just my own money and I have not claimed that it would precisely mirror an index. Also, I can nudge it back on track with dollar cost averaging.
Conclusion
This is the most cost and tax efficient way to index on an after tax basis. Most people should invest most of their money this way.
TL; DR
I’m going with 250/150; you might want to consider doing the same here.