Most of your net worth in one stock?Diversify without losing a third to taxes.

An exchange fund lets you contribute appreciated stock in-kind to a diversified fund without triggering a sale. Under Section 721 of the tax code, the contribution is not a taxable event, so your full pre-tax balance keeps compounding. After 7 years + 1 day you can redeem in liquid ETF shares with carryover basis, keeping the tax deferral until you need liquidity.

It is written into the tax code. Section 721 lets investors contribute property to a partnership without it counting as a sale, and exchange funds have used it for decades, mostly for the very wealthy at seven-figure minimums. Glidepath starts at $100,000.

If and when you sell. An exchange fund defers capital gains tax; it does not erase it. Your original cost basis carries over, so the gain is still there, but you decide when to realise it and the full amount stays invested in the meantime. Under current law, positions held until death may receive a stepped-up basis; talk to your tax advisor.

Qualified purchasers ($5M+ in investable assets), contributing at least $100,000 of stock. The questions after you click tell you whether you qualify before anyone asks you for anything else.

The seven year holding period comes from the tax code, not from any individual fund — it's what separates a genuine exchange from what the IRS calls a 'disguised sale'. After seven years and one day, investors are eligible to redeem, or stay invested until liquidity is needed.

After seven years and one day, investors are eligible to redeem securities or cash, or may choose to stay invested until liquidity is needed. Some modern exchange funds are designed so that, following the holding period, investors may receive ETF shares rather than an unmanaged basket of individual stocks — offering a simpler exit into a daily liquid and diversified position. An exchange fund defers capital gains tax; it does not erase it. Your carried-over basis means the embedded gain is still there, and tax applies if and when you ultimately sell. The benefit is control — you decide when the gain is realized — plus the compounding advantage of keeping the full pre-tax amount invested in the meantime. Under current law, positions held until death may receive a stepped-up basis, which can eliminate the deferred gain for heirs; consult your tax advisor.