The Cache Exchange Fund helps turn a sticky situation into a major value add for one firm’s clients.

For many clients, a small position can unexpectedly balloon into a significant portion of their wealth. 

"It’s a very good problem to have,” says Steve Stroud, the Senior Wealth Manager at Three Bell Capital. “It means that you've done something right – that either you invested well, or you worked for a great company for a long time and received a lot of equity compensation."

When he discovers concentration risk in a client’s portfolio, Steve Stroud tells his clients about The Cache Exchange Fund. "We bring it up during the first meeting," Stroud explains. "We like to bring it up as… a very powerful example of what they might not know about yet."

See Stroud explain how Cache helps Three Bell build stronger client relationships. Or read on for a deep dive into what the Cache Exchange Fund means to the firm:

Balancing Growth and Risk

In cases like the hyper-growth of NVIDIA, the consistent rise of Apple, or the repeated runups of Meta stock, Three Bell often sees client portfolios become unbalanced. "The stock has simply done so much better than markets that what wasn't a concentrated position suddenly has become one,” he says.

However, clients also remember downturns like those in 2022 and 2020, which prompt a critical question: How can they manage risk without sacrificing growth potential?

Stroud says Cache has been an effective talking point in these situations. "Cache has been a really well-received conversation starter. Very well-received tool," says Stroud. For Three Bell, Cache opens up opportunities to:

• Provoke thoughtful discussions and position Three Bell as a trusted thought leader.
• Demonstrate skill and value by introducing clients to a modern, tax-efficient solution.
• Help reluctant clients take action to reduce risk and continue on a growth trajectory.

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A modern solution that finally works for clients

Traditional exchange funds often weren’t available to clients, and their broad market benchmarks weren’t as growth-oriented as Three Bell’s clients expected. "Going to what traditional exchange funds had offered, which was like going from a Lamborghini back to a Buick or something, was a difficult conversation," says Stroud.

Cache changes that narrative by allows advisors like Stroud to:

• Engage Clients Proactively: "We like to have what we call our Contrary to Position Toolkit. On any introductory meeting, when we don’t quite know what the client’s real needs are… it’s a good starting point for the conversation, just to open up the kimono a little bit." Instant matching also lets the Three Bell team research potential allocations on the fly.
• Introduce a Compelling Growth Story: Cache is benchmarked to the Nasdaq-100, a growth-oriented index with more allocations for fast-growing tech companies: "While one company has been great one day, you don't know who the next leader is going to be. By benchmarking to that index… you’re going to be participating in that [upside] as well."
• Provide Simplicity and Efficiency: "The technological aspect of what Cache has brought to the table and simply the ease of operations has been a very powerful tool," says Stroud. "Doing so at an effective and reasonable cost… has been the biggest improvement we’ve seen in the space."

(To get oriented around exchange funds, take a look at our exchange funds overview or a more granular view of the history and tax benefits of exchange funds.)

The outcome? More confident action.

Telling clients about The Cache Exchange Fund helps them set productive long-term goals while developing a clearer understanding of what their "destination portfolio" could look like. "It’s a delicate conversation,” says Stroud, but offering more effective alternatives helps position Three Bell as a forward-thinking advisor. 

“Cache has been a very impactful and effective tool to solve those problems,” says Stroud. By helping clients reduce concentration risk and take steps to secure their future, Three Bell ensures they can focus on what matters most: living their lives with confidence and a strategy for the future

If you’d like to see how Cache can help your firm build stronger connections with clients, set up a time to talk or enter some basic information to see if an allocation is available.

<p class="blog_disclosures-text">Nasdaq-100 is a stock market index made up of securities issued by 100 of the largest non-financial companies listed on the Nasdaq stock exchange is unmanaged and are not subject to fees and expenses typically associated with investment funds, investments cannot be made directly into an index.
Individual stocks mentioned are provided for illustrative purposes only and are not a recommendation to buy or sell any particular security.</p>

<p class="blog_disclosures-text">Products offered by Cache Financials, Inc. (Cache) are distributed by Cache Securities LLC, an SEC-Registered Broker-Dealer and Member of FINRA and SIPC. Cache Advisors LLC is the advisor to the Cache Exchange Fund and is an Investment Advisor registered with the SEC. Registration does not imply a certain level of skill or training. Investments are available only to residents of the United States in jurisdictions where Cache is registered.</p>

<p class="blog_disclosures-text">The purpose of this material is to inform, and it should not be considered an offer, solicitation of an offer, or advice to buy or sell securities or investment products. The investments mentioned may not be appropriate for all clients. All investments involve risk. Cache does not make investment recommendations; investors are responsible for their investment decisions. Before making an investment decision, each investor should carefully consider the risks associated with the investment and decide, based on their particular circumstances, that the investment is within their investment objectives and risk tolerance.</p>

<p class="blog_disclosures-text">The Cache Exchange Funds are alternative investments. Regulations require certain eligibility criteria for participation and are open to either accredited investors or qualified purchasers who have eligibility criteria as specified in the offering documents. Exchange funds are suitable only for eligible, long-term investors willing to forego liquidity and put capital at risk for substantial periods. Regulations require a minimum holding period to realize the potential advantages. They may also have higher fees than traditional investments.</p>