Tax-Aware Investment Strategies
Access Quantinno's Fundamental Arbitrage Fund (QFAF)
Access QFAF — Quantinno's institutional-grade, market-neutral hedge fund strategy designed to generate uncorrelated returns and reduce your tax burden through short-term capital gains and ordinary loss generation.
Tax Optimization Strategies
Institutional-Grade Alpha With Built-In Tax Efficiency
Investors seeking uncorrelated returns and true portfolio diversification face a limited set of options, and most of those options come with a significant tax drag. Traditional hedge fund gains are typically taxed as ordinary income, and while tax-loss harvesting can offset capital gains, its ability to reduce ordinary income is limited to just $3,000 per year.
Quantinno's Fundamental Arbitrage Fund (QFAF) was built first and foremost to generate risk-adjusted, market-neutral returns through systematic alpha, independent of stock market direction. The strategy employs a diversified, quantitative long-short equity approach designed to exploit behavioral and systematic biases across over 1,000 U.S. equities.
As a structural byproduct of how the strategy trades, QFAF may also generate short-term capital gains and ordinary losses, which can allow investors with high levels of ordinary income to potentially defer taxes and improve after-tax outcomes. This tax efficiency is a meaningful secondary benefit, but the investment case stands on its own: a disciplined, research-driven strategy seeking consistent alpha with low correlation to traditional asset classes.
Quantinno Fundamental Arbitrage Fund (QFAF)1
Market-Neutral Equity With Tax-Efficient Characteristics
QFAF uses a diversified, market-neutral approach rooted in rigorous fundamental research to seek consistent, uncorrelated returns. Its trading structure may also produce favorable tax characteristics as a natural consequence of the strategy's design.
How It Works:
- Multi-factor stock selection model incorporating valuation, momentum, quality, sustainable earnings, management signaling, investor sentiment, and behavioral bias factors
- 500+ long positions and 500+ short positions across the largest 1,500–2,000 liquid U.S. equities
- Market-neutral construction targeting net zero beta — designed to perform independently of stock market direction
- Daily trading with short-term profit taking to systematically capture tactical opportunities
- Targets ~8% annualized risk with systematic drawdown controls and common style factor management
- Tax-efficient structure — as a byproduct of its trading activity, the strategy may generate short-term capital gains and ordinary losses, which can potentially benefit investors with significant ordinary income
Quantinno DEALS Long-Short SMA Strategy2
Tax-Aware Long-Short Equity
Quantinno's DEALS Managed Account platform uses a modest long/short extension to build more dynamic, customized equity portfolios — designed to deliver diversified equity exposure, reduce portfolio risk, and generate consistent investment returns. The platform's structure may also produce ongoing tax benefits that traditional long-only approaches cannot sustain. DEALS SMAs are individually managed accounts, offering full transparency and the flexibility to tailor each portfolio to the investor's specific holdings and objectives.
How it works:
- Modest long/short extension on top of a diversified equity portfolio, seeking to enhance returns beyond what traditional long-only approaches can deliver
- Three flexible applications — build a diversified core equity portfolio (DEALS Core), systematically diversify out of concentrated stock positions (DEALS Exchange), or layer uncorrelated return potential onto existing holdings without additional capital (DEALS Overlay)
- Individually managed accounts with full transparency, benchmark selection, and the ability to customize each portfolio to the investor's specific holdings and objectives
- Powered by Quantinno's proprietary TaxEdge® Technology and the same institutional-grade research and portfolio construction engine behind QFAF
- Tax-efficient structure — the long/short extension may naturally generate ongoing tax benefits, including in situations where traditional long-only tax-loss harvesting strategies have become "stuck"
1. Available for Qualified Purchasers (QP), or investors with investible assets of $5,000,000 or more.
2. Available for Accredited Investors (AI), or investors with $200,000 in individual income (or $300,000 with spouse) or a net worth of $1,000,000 or more (excluding primary residence).
for High-net-worth investors
Designed for High-Earning Professionals & Sophisticated Investors
QFAF is built for individuals seeking institutional-quality, uncorrelated returns with the added advantage of a tax-efficient structure for those with significant ordinary income.
Executives & Entrepreneurs
High-Earning Professionals
Physicians, attorneys, consultants, and other high-earning individuals or families looking for risk-adjusted returns in a structure that may also improve after-tax outcomes.
Investors Seeking Uncorrelated Returns
Those looking to diversify beyond traditional equity and fixed income exposure with a strategy that has demonstrated low-to-negative correlation to major asset classes.
Investors with Concentrated Portfolios
Individuals with highly appreciated or concentrated positions who want to add a market-neutral allocation that doesn't depend on market direction.
About Chicago Partners
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About Quantinno
Quantinno Capital Management is a New York-based asset management firm founded in 2018 by a team of industry veterans — led by Hoon Kim, Ph.D., CFA — to bring institutional-quality quantitative investment strategies to sophisticated investors. The firm manages $13.7B+ in client assets across 3,100+ managed accounts. The team averages 20+ years of experience in quantitative investment management, with senior leaders drawn from AQR, Goldman Sachs, Citadel, Coatue, and Franklin Templeton. Quantinno's proprietary TaxEdge® Technology powers its DEALS Managed Account platform, which was launched in March 2021.
Important Disclosure Information
Past performance is no guarantee of future results. Different types of investments involve varying degrees of risk. Therefore, there can be no assurance that the future performance of any specific investment or investment strategy (including the investments and/or investment strategies recommended and/or undertaken by Chicago Partners Investment Group LLC ["CP"]), or any consulting services, will be profitable, equal any historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Neither CP's investment adviser registration status, nor any amount of prior experience or success, should be construed that a certain level of results or satisfaction will be achieved if CP is engaged, or continues to be engaged, to provide investment advisory services. CP is neither a law firm, nor a certified public accounting firm, and no portion of its services should be construed as legal or accounting advice. Moreover, no portion of the foregoing content serves as the receipt of, or a substitute for, personalized investment advice from CP. A copy of our current written disclosure Brochure and Form CRS discussing our advisory services and fees is available upon request or at www.chicagopartnersllc.com. The scope of the services to be provided depends upon the needs and requests of the client and the terms of the engagement.