The Challenge Every Investor Faces
Picture this: You’ve built a successful portfolio over the years, but now you’re facing a common dilemma. Your investments have grown significantly, leaving you with a highly concentrated position that creates excessive volatility—one of the biggest risks in investing today. You want to diversify, but the thought of triggering massive capital gains taxes stops you in your tracks.
What if we told you there’s a solution that lets you diversify into a well-balanced ETF without paying immediate capital gains taxes?
Meet ExchangiFi: Your Gateway to Tax-Smart Diversification
ExchangiFi is revolutionizing how investors and advisors approach portfolio diversification. Our platform connects you directly with ETF issuers to participate in Section 351 tax-deferred exchanges—a powerful but underutilized strategy that could transform your investment approach.
How It Works
The concept is elegantly simple: instead of selling your concentrated positions and triggering taxes, you contribute your securities directly to a newly launching ETF. In return, you receive shares in a diversified fund while deferring capital gains taxes until you eventually sell the ETF shares.
The Three Golden Rules of Section 351 Exchanges
Rule #1: Diversification Requirements
Your contributed securities must meet strict diversification standards:
- No single position can exceed 25% of your total contribution’s market value
- The top 5 positions cannot exceed 50% of your total contribution
Our sophisticated calculator handles the complex math, even looking through ETFs to their underlying securities to ensure compliance.
Rule #2: Liquidity Standards
You can contribute any liquid securities that trade intraday:
- Individual stocks
- ETFs and mutual funds
- Bonds
- Closed-end funds
- Note: Cash contributions don’t count toward the exchange
Rule #3: Strategic Alignment
Your securities must align with the fund’s investment thesis. While emerging market funds require relevant securities, actively managed funds offer maximum flexibility for diverse contributions.
Real Success Stories
ExchangiFi has already facilitated successful syndicated Section 351 exchanges into launched ETFs, helping investors defer significant tax liabilities while achieving their diversification goals. Each success story represents millions in deferred taxes and reduced portfolio risk.
Your Complete Solution for Tax-Smart Investing
For Individual Investors:
- Browse featured deals from upcoming ETF launches
- Use our manual portfolio calculator to test diversification scenarios
- Access detailed fund information and connect directly with fund managers
- Secure, SOC 2 compliant platform protecting your sensitive data
For Financial Advisors:
- Manage multiple client portfolios from a single dashboard
- Create customized conversion plans for each client
- Upload spreadsheets or enter positions manually
- Access real-time market data for accurate calculations
- Handle complex tax lot information seamlessly
The Technology Behind the Magic
Our platform integrates live market data to provide up-to-the-minute valuations and compliance checking. The sophisticated software maximizes your capital gains tax deferral while ensuring all regulatory requirements are met. You can even customize which securities to contribute and freeze specific share amounts to fine-tune your exchange.
What Happens After the Exchange?
Once your securities are transferred and the new ETF launches, you receive fully liquid ETF shares in your brokerage account. Here’s the beautiful part: your original tax lot information transfers with the shares—same acquisition dates, same cost basis, no step-up. Meanwhile, the ETF’s underlying securities can rebalance without triggering taxable events for you.
Timing Is Everything
Remember, Section 351 exchanges must occur before an ETF’s launch—you only get one opportunity per fund. That’s why ExchangiFi’s platform is invaluable, showing you all available pre-launch opportunities with SEC approval. Typically, fund managers provide a 3-4 month window to gather investor interest and facilitate exchanges.
Ready to Transform Your Portfolio?
Whether you’re an individual investor with a concentrated position, a financial advisor seeking tax-efficient solutions for clients, or a family office managing complex portfolios, ExchangiFi provides the tools and connections you need.
Take the Next Step:
- Register for free access to live deal flow
- Explore our portfolio calculator
- Connect with fund managers launching innovative ETFs
- Discover how much you could save in deferred taxes
The intersection of tax efficiency and portfolio diversification has never been more accessible. With ExchangiFi, you’re not just investing—you’re investing smarter.
Ready to explore Section 351 exchanges for your portfolio? Visit ExchangiFi today and discover how to diversify without the tax consequences. Have questions? Our team of experts is ready to help you navigate this powerful strategy.