Exchange funds are for investors with a long-term investment horizon, and they require a seven-year commitment to achieve tax benefits. However, there are times when investors need to redeem their shares early. Here’s how early redemptions work at different milestones:
Before 7 years
Our Access series of exchange funds (for Accredited Investors) have a 2-year lock-up period, during which investors cannot withdraw their contributions. Learn about the lock-up period.
Our Select series of exchange funds (for Qualified Purchasers) does not have a lock-up period.
Between the end of the lock-up (if applicable) and the 7-year anniversary, early redemption requests are satisfied by distributing your original contribution back to you at a rate that is the lesser of:
The contributed stock value at the time of redemption
Or the value of your exchange fund shares based on the fund’s net asset value.
Any remainder is retained until term commitments are met. Note that early redemptions are subject to a 1-2% early redemption fee.
After 7 years
Once you are past the seven-year mark, you can redeem a diversified portfolio on a tax-deferred basis. No redemption fees are applicable after seven years, and your original cost basis carries over to the stocks you withdraw from the fund.
See more details about redemption AFTER seven years.