Cache exchange funds are structured to promote long-term investment, but they do provide mechanisms for early access under certain conditions:
Lock-Up Period: Our Access series of exchange funds (for accredited investors) has 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.
Early Redemption Fees: Investors may choose to withdraw their stocks before the seven-year term ends by paying an early redemption fee. This fee ranges from 1-2% of the value of the withdrawn amount, which is meant to discourage early redemptions and helps maintain fund stability.
Return of Original Shares: In cases of early withdrawal, investors generally receive the original stocks they contributed, rather than a diversified portfolio. Redemption requests are satisfied by distributing the original stocks at a rate that is the lesser of:
The value of the stock you contributed, calculated at the time of redemption
Or the value of your exchange fund shares based on the fund’s current net asset value.
The ability to withdraw a diversified portfolio while deferring taxes only becomes available after seven years. See more details.
If it’s helpful, we also have a detailed explanation of the seven year holding requirement.