Burney U.S. Factor Rotation ETF (BRNY): Adaptive Factor Rotation Across Size And Style

The Burney U.S. Factor Rotation ETF dynamically adjusts exposure between size and style factors — such as large- versus small-cap and growth versus value — based on prevailing market phases, rather than attempting to time the market. The fund pairs this rotation with Burney’s proprietary quantitative stock-selection model, which scores more than 2,500 U.S. equities on growth, value, profitability, momentum, and quality, incorporating alternative datasets such as companies’ digital footprints and analyst expectations.

The Burney Company was founded in 1974 by Jack Burney, who developed the firm’s own stock-selection model rating companies on growth, valuation, profitability, quality, and momentum. Headquartered in Reston, Virginia, the firm manages more than $3 billion in assets across five decades of research-driven portfolio management.

Section 351 of the Internal Revenue Code is a long standing rule: when one or more persons transfer property to a corporation solely in exchange for that corporation’s stock, no gain or loss is recognized on the transfer. It is the same principle founders rely on when they contribute assets to a newly formed company, applied to portfolios of marketable securities. Advisors often describe it as the 1031 exchange of the equity world, though the two provisions are separate and work differently.

In practice, an investor holding appreciated securities contributes those securities in kind to a newly organized entity and receives shares of that entity in return. Because nothing is sold, no capital gain is realized at the moment of the exchange. The investor’s original cost basis and holding period carry over to the new shares, so the deferred gain travels with them and is recognized when the shares are eventually sold. Deferral is the benefit. Elimination is not on offer.

Alignment is the manager’s call. The diversification test is the tax question, and missing it can cause the transfer to be treated as a taxable sale in full. Other conditions matter in practice as well. The exchange cannot be a pre arranged sale in substance, post contribution changes to the portfolio are examined, tax law can change, and the Internal Revenue Service may look past the form of a transaction to its substance. This is why the work is done with counsel and a tax advisor rather than on the strength of a marketing page.