Meb Faber, Cambria

Clark Allen is the head of ETFs at Horizon Investments, a firm that blends institutional asset management with a deep understanding of how real clients experience their portfolios emotionally. Clark started his career in public accounting doing M&A valuation work, moved into institutional asset management at insurance companies, then worked at a multi-billion dollar single family office handling both institutional-quality investing and direct client relationships. On this episode of Behind the Ticker, Clark joins Brad to discuss BENJ, the Horizon Landmark ETF, a cash management strategy using box spreads to deliver T-Bill-like returns without kicking off taxable income.

Horizon Investments: Where Institutional Meets Emotional

Clark describes what drew him to Horizon: the firm's ability to blend institutional asset management quality with genuine understanding of client psychology. This isn't lip service. Horizon builds their model portfolios specifically around the concept of client emotional capacity. They construct distribution portfolios with an equity overweight (because higher equity allocation gives a higher probability of long-term success) paired with a large "steady reserve" or liquidity bucket. The theory is that if clients can just focus on their liquidity bucket meeting near-term spending needs, they can tolerate the volatility in their equity allocation without panicking.

BENJ was designed to serve that liquidity bucket. It's not trying to generate equity-like returns. It's trying to be the most efficient possible cash or near-cash holding in a portfolio, with a specific structural advantage around taxes.

How Box Spreads Create T-Bill Returns Without Income

BENJ uses box spreads in the options market to access what Clark calls "T-Bill plus" returns. A box spread is a combination of options positions that creates a synthetic loan where you're effectively lending money to the Options Clearing Corporation (OCC). The return is predetermined at the time of the trade and is very close to the T-Bill rate, sometimes slightly above it.

The critical innovation is that box spreads don't generate traditional interest income. They create capital gains (or losses) that are realized at expiration or when the position is closed. For taxable investors, this means you can hold BENJ in a non-qualified account and earn cash-like returns without the regular income distributions that force annual tax payments. Clark sees this as a genuine structural breakthrough for tax-efficient portfolio construction.

The fund targets 1-3 month box spreads and is relatively small compared to some of the other products in the space, so Clark notes they're being tactical about execution. The risk profile is extremely low. The counterparty is essentially the OCC, and if the OCC fails, you won't get paid, but Clark points out that OCC failure would mean the entire options market has collapsed, at which point everyone has much bigger problems.

The Bigger Vision: Tax-Efficient Fixed Income

Clark makes a broader argument that BENJ is just the beginning of a trend. Today, many large RIAs optimize for taxes by putting all fixed income in qualified accounts (IRAs) and all equities in taxable accounts. But what if fixed income products existed that didn't kick off taxable income? You could hold them in non-qualified accounts without worrying about tax drag. BENJ does this for cash. Clark hints that similar innovation is coming for aggregate bonds, high yield, and other fixed income categories where the income distribution creates tax inefficiency in taxable accounts.

This vision matters because it changes portfolio construction at the advisor level. Instead of being forced into suboptimal asset location decisions based on tax consequences, advisors could hold any asset class in any account type and optimize purely for investment merit. Clark sees this as one of the most important structural innovations the ETF industry is working on.

Horizon's ETF Expansion

Horizon also has HBTA, and Clark indicates the firm has a busy pipeline of new products planned. The firm's background in model portfolios and TAMP-like services for advisors gives them a built-in distribution channel for their ETFs. When you're already managing model portfolios for advisors, adding your own ETFs as components of those models creates natural demand. Clark sees the ETF business as an extension of Horizon's existing advisory platform rather than a standalone venture.

Key Takeaways

• BENJ uses 1-3 month box spreads to deliver T-Bill-like returns without kicking off traditional interest income, creating a tax advantage for non-qualified accounts that standard money market funds and Treasury ETFs can't match.
• The counterparty risk is the OCC (Options Clearing Corporation), making the risk profile extremely low. Returns target T-Bill plus through the synthetic lending embedded in box spread mechanics.
• Horizon builds model portfolios around client emotional capacity, with large liquidity buckets (where BENJ fits) that let clients tolerate equity volatility without panicking.
• Clark sees box spread-based products as the beginning of a broader trend toward tax-efficient fixed income ETFs across aggregate bonds, high yield, and other categories.
• More ETF launches are planned for Horizon in the near term. Learn more at horizoninvestments.com and horizonetfs.com.

Listen to the full conversation on Spotify, Apple Podcasts, or YouTube.