The Cache Exchange Fund was designed to be more accessible than traditional exchange funds. In launching our funds, our goal was to broaden eligibility, to make it easier to join an exchange fund, and to make it as cost-effective as possible.
Here are the main differences:
Higher Capacity for Growth Stocks: Unlike traditional exchange funds, which are typically only available for broad market indices like Russell 3000, Cache offers the first Nasdaq-100 exchange fund, which offers a higher capacity for growth stocks. Cache also plans to offer several additional Exchange Funds linked to other indexes such as the S&P Growth and S&P 500.
Faster Diversification: While most exchange funds hold a closing on a quarterly or semi-annual basis, Cache typically offers a bi-weekly close, helping with faster diversification.
Broader Eligibility: Cache is available to Accredited Investors and Qualified Purchasers, while the other providers are only open to Qualified Purchasers. ETF rebalancing also allows us additional tools to closely align to the underlying benchmark (in our case, typically the Nasdaq-100 or S&P 500) more closely by rebalancing the exchange fund portfolio with an ETF. To do this, we contribute a basket of stocks from the exchange fund to a new ETF in-kind. The ETF manager can then rebalance holdings and steer the portfolio towards a desired benchmark while maintaining tax efficiency.
Lower Minimums: Exchange funds typically target an ultra-wealthy clientele with a minimum of up to $1 million, whereas Cache is available for investments starting at $100,000.
Lower Fees: Cache charges a lower management fee between 0.40% - 0.95% and no sales fees or commissions. Lower fees are based on the amount contributed, with a higher contribution amount making the investor eligible for a lower management fee.