Diversifying Concentrated Stock Positions

Neuberger Berman

Research

9 Pages

Neuberger Berman tackles the problem of concentrated, low basis stock positions that create both portfolio risk and tax headaches. The paper builds a framework that separates risk management from tax management, then maps a toolkit of option structures, staged selling, tax managed portfolios, 351 exchanges, and index option overlays. The emphasis sits on tailoring combinations of these tools to each client’s objectives, time frame, and tolerance for complexity.

Date published: October 2025

Key Takeaways

Concentration risk lens: Recasts large single stock holdings as a joint risk and tax problem that needs structured planning.
Menu of tools: Lays out option strategies, staged selling, long short portfolios, and 351 exchanges for complementary solutions.
Blended solutions path: Encourages combining strategies over time to align diversification pace with risk tolerance and tax goals.
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