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Is the Cache Exchange Fund rebalanced quarterly, like the Nasdaq-100?
Is the Cache Exchange Fund rebalanced quarterly, like the Nasdaq-100?
Updated over a week ago

The Cache Exchange Fund does not typically rebalance its portfolio as frequently or in the same manner as the Nasdaq-100 index, which is rebalanced quarterly. Instead, the fund focuses on maintaining a diversified portfolio that approximates the exposure and characteristics of the Nasdaq-100.

Here's our general approach:

  1. Passive Management: The fund is primarily passively managed, meaning that it does not frequently buy and sell assets to adjust its holdings. This approach reduces transaction costs and potential tax events for investors.

  2. Rebalancing through Enrollment: Instead of regular rebalancing, the fund may adjust its portfolio when there are significant changes in the investment environment by using enrollment windows to adjust the targeted exposure and diversification by adding undersubscribed stocks to the fund.

  3. Use of Cash and New Contributions: The fund may use cash inflows, such as dividends or new investor contributions, to make portfolio adjustments if needed. This can help align the fund more closely with its investment objectives without the need to sell existing assets, which can trigger taxable events.

Our fund managers seek to avoid frequent buying and selling of assets that can create taxable events for fund participants. This strategy allows the Cache Exchange Fund to maintain stability and consistency in its investment approach while still aiming to provide levels of risk and returns that are similar to the Nasdaq-100 index.

For more detail see our guide on how exchange funds work.

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