Is an exchange fund right for you? Learn what they do, see benefits and drawbacks, and find answers to all your basic questions.
Exchange Fund
Diversify without a giant tax bill
Holding on to highly appreciated stocks in your portfolio?
Exchange your stock for a diversified fund without triggering taxes. It's a technique used by the ultra-wealthy, now available for you.
What’s an
exchange fund?
exchange fund?
A diversified fund created by pooling investors with concentrated stock positions. Investors contribute stocks in specific ratios to mimic an index fund, and each investor receives fund shares in exchange for their stocks. Qualifying assets (e.g. real estate) are held in the fund to maintain an exchange fund status.
VIDEO...
A Wealth Farming Exchange Fund lets you
Keep more of your money
Contributions and redemptions aren’t taxable events under the current IRS code (IRC 721). The money you would have paid in taxes stays invested and compounds over time.
Minimize your risk
Contributions and redemptions aren’t taxable events under the current IRS code (IRC 721). The money you would have paid in taxes stays invested and compounds over time.
Invest in quality portfolios
Contributions and redemptions aren’t taxable events under the current IRS code (IRC 721). The money you would have paid in taxes stays invested and compounds over time.
See the difference
Let’s say you want to diversify $300K in stock. Doing it through an exchange fund defers tax liabilities, creating significant growth over time.
40.8%
potential incremental pre-tax gain with an exchange fund.
How does redemption affect my gains? Try our simulator
Making exchange funds more accessible
$100k minimum investment
Others: $500K – $1M
All accredited investors
Others: Qualified Purchasers only ($5M+ in Investments)
0.4% – 0.8% fee based on contribution
(WHOLESALE DISCOUNTS THROUGH YOUR FINANCIAL ADVISOR)
Others: Higher fees + sales fees + performance fees
How it works
Enroll
Tell us about your concentrated stock holdings and cost basis. It only takes a few minutes. We will make sure you are eligible and match you to the right pool.
Contribute
We’ll notify you when there’s a match for a Wealth Farming Exchange Fund. Our simple and precise stock transfer experience will help you transfer over the right stocks from your current brokerage.
Exchange
You’ll receive shares that represent your contribution to the fund. Watch your investments compound tax-deferred, and redeem in seven years for a diversified portfolio.
Compare exchange fund providers
| Wealth Farming |
Other Exchange Fund Providers
(Large Wall St Investment Banks) |
|
| Minimum investment | $100k | $500k – $1M |
| Eligibility requirements |
ACCREDITED INVESTORS
$200k+
income for the last 2 years
OR
$300k+
with spouse
OR
$1M+
net worth excluding primary residence
|
QUALIFIED PURCHASERS
$5M+
in investments
|
|
0.4% – 0.8% fee based on contribution
$200k+
0.65%
$200k+
0.65%
$200k+
0.65%
Zero sales fee or performance fee. Available directly through Wealth Farming. Wholesale discounts through your advisor. |
1.5% – 2.25% overall annual fee
1.50%+
sales fee
0.85%+
management fee
Available for private wealth clients only
Variable performance fee
|
|
| Minimum holding period | 2 years | 3 years |
| Holding period for tax advantages (required by the tax code) |
7 years
What if I want to redeem earlier?
|
7 years |
| The data for the key terms of other exchange fund providers are sourced from certain large institutional providers of exchange funds which Wealth Farming believes to be relevant competitors for its own exchange fund. However, key terms are not meant to be representative of any particular competitor or other provider of exchange funds. Wealth Farming makes no representation as to the accuracy of this information nor does Wealth Farming create an implication that such data has been updated as of any particular time from when such data was originally sourced. | ||
Learn
Learn the basics
What’s an exchange fund?
Get into the details
How do exchange funds work?
Get a detailed view inside exchange funds. This definitive guide includes examples and details from setup to redemption to taxation.
Exchange Fund calculator
See how much you can save
Try our personalized simulator to see how an exchange fund can help you reduce the tax drag on your portfolio.
Common questions
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