Diversify your stocks. Defer your taxes.
Trusted by leaders in tech and finance
... a simple and accessible approach to diversifying stocks that many lifelong tech workers never knew existed.
The individual above is a current investor in the Cache Exchange Fund and is not being compensated for sharing their opinion and experience with our firm. Any compensation creates a conflict of interest and the above individuals comments may not be representative of any other person’s experience with the firm.
How exchange funds work
Exchange funds
What’s an exchange fund?
A diversified fund created by pooling investors with concentrated stock positions. Investors contribute stocks in specific ratios to mimic an index fund, and each investor receives fund shares in exchange for their stocks. Qualifying assets (e.g. real estate) are held in the fund to maintain an exchange fund status.
have been around since the 1960s, but only available through private wealth channels. We’ve made this technique used by the ultra-wealthy available for you.
1. Get started
Tell us about your stocks and how much you’d like to diversify. Our algorithms match you against a carefully-balanced portfolio.
Check availability
Availablility checker is designed to help investors receive a preliminary indication of if their security is available, investors are received on a first come first serve basis and your investment is not committed until you receive final confirmation from Cache.
2. Review your invitation
You are invited to our monthly fund close. Each investor reviews the fund details, commits their shares, and signs off on their participation. Matched shares are accepted into the fund on the close date.
Illustration Disclosure
Example provided for illustrative purposes only to demonstrate how an exchange fund works, actual allocations will vary based on fund and investor concentration, please review fund documents for more detailed information.
3. Monthly exchange fund close
Monthly Close Disclosure
Cache seeks to offer closings into the private funds once every month but this is not guaranteed and subject to change at Cache's discretion.
On the close date, we'll exchange your stocks for a proportionate share of the fund. It's instant diversification, without a tax bill.
4. Redeem your exchange fund shares
After seven years, you can redeem your fund shares for a diversified basket of stocks. No taxes are due until you sell.
Concentration builds wealth. Diversification preserves it.
Our Exchange Funds are benchmarked to the Nasdaq-100 index,
helping you reduce risk without giving up on growth.
Individual stocks vs. Nasdaq 100 Index, 2001-2023
This analysis is based on the returns of individual stocks in the Nasdaq-100 index from January 1, 2001, through September 25, 2023. Our analysis includes securities with different lifetimes in the index since securities are added and removed from the Nasdaq-100 over time. For the purposes of comparison, each security’s return is measured over its lifetime in the index.
Reduce risk in your portfolio
A diversified portfolio reduces your exposure to specific business risks, and often experience lower volatility and drawdown risk.
Stay invested in growth
By benchmarking to Nasdaq-100, our funds maintain your exposure to growth stocks while reducing concentration risk.
Keep all your principal invested
Contributions and redemptions aren't taxable events under current regulations (IRC 721). Your money continues to work for you.
Disclosure
Cache does not provide tax or legal advice. Prospective investors should consult with a tax or legal advisor before making any investment decision. The information on this webpage is for U.S. residents only and does not constitute an offer to sell, or a solicitation of an offer to purchase, securities in any jurisdiction to any person to whom it is not lawful to make such an offer.
See the difference
Let’s say you want to diversify $300K in stock. Doing it through an exchange fund defers tax liabilities, creating significant growth over time.
40.8%
potential incremental pre-tax gain with an exchange fund.
Keep more of your money
With an exchange fund, you get a tax-deferred diversified portfolio in 7 years. Here's how the timeline compares with other tax-advantaged instruments.
Exchange Funds
7YRS
Charitable Trusts
20yrs
IRA
30 – 40yrs
401K
30 – 40yrs
How does redemption affect my gains?
How redemption works
Exchange fund redemptions is not the same as selling stocks. At redemption, investors receive an optimized basket of stocks that matches their ownership percentage and cost basis. Investors will need to meet the 7-year investment timeframe to receive a diversified portfolio. The distribution is not a taxable event as investors continue to own their stocks.
A redeemed portfolio can continue to grow on a tax-deferred basis, or continue to grow in an exchange fund. Heirs can inherit the diversified portfolio at a stepped-up cost basis.
Simulated results for illustrative purposes only. Assumes a tax status of married filing jointly in CA with a combined annual income of $600,000+. Effective capital gains tax rate: 34.75%. Initial cost basis: $50,000. Expected annual portfolio return: 10%. Investment Term: 7 years. The expected annual portfolio return of 10% is hypothetical, gross of fees, and used to illustrate the benefits of potential tax deferral.
Disclosure
Chart takes into account California state income tax and is applicable only to residents of California, this is not applicable to investors in other states. There is a risk in taking into account the assumed rate of return when performing this calculation as a lesser return would reduce the impact on the tax benefit, and the rate of return is not guaranteed. The potential for investment loss could negatie the tax savings received. An investor should consider their anticipated investment horizon and income tax bracket when making an investment decision as the illustration may not reflect these factors. Diversification does not guarantee profit or protection from loss.
Backed by decades of experience
Our investments team has managed portfolios worth tens of billions at Goldman Sachs and Eaton Vance, including the largest exchange funds.
Our product team has built world-class products at Uber, Stripe, Robinhood and LinkedIn.
Funds tailored for your wealth journey
Accredited Investor
Accredited Investor eligibility generally requires a minimum net worth of $1M for an individual (excluding primary residence), or an annual income of $200K+ ($300K with spouse) for the past two years, and reasonable expectation to do so in the current year.
Accredited Investor
Accredited Investor eligibility generally requires a minimum net worth of $1M for an individual (excluding primary residence), or an annual income of $200K+ ($300K with spouse) for the past two years, and reasonable expectation to do so in the current year.
Qualified Purchasers
Qualified purchaser eligibility generally requires the Accredited Investor standard to be met and minimum investment assets of $5 million for individual investors.
Qualified Purchasers
Qualified purchaser eligibility generally requires the Accredited Investor standard to be met and minimum investment assets of $5 million for individual investors.
0.50% – 0.95%
Fee based on contribution
Zero sales fee or performance fee.
Dynamic discounts for certain stocks.
Wholesale pricing through advisors.
Referral discounts available.
0.50% – 0.95%
Fee based on contribution
Zero sales fee or performance fee.
Dynamic discounts for certain stocks.
Wholesale pricing through advisors.
Referral discounts available.
Want to understand all the details?
Schedule a chat with our Investment team after you share some information about your situation.
Compare exchange fund providers
Other Exchange Fund Providers
(Large Wall St Investment Banks)
Minimum investment
$100k
$500k – $1M
Eligibility requirements
Accredited Investors
$200k+
income for the last 2 years
OR
$300k+
with spouse
OR
$1M+
net worth excluding primary residence
Qualified Purchasers
$5M+
in investments
Fees
0.50% – 0.95% fee based on contribution
$100K+
0.95%
$250K+
0.85%
$500K+
0.70%
$1M+
0.60%
$5M+
0.50%
Zero sales fee or performance fee.
Dynamic discounts for certain stocks.
Ask your advisor about wholesale pricing, or avail referral discounts.
1.5% – 2.25% overall annual fee
Upto 1.50%
sales fee
0.85% - 0.95%
management fee
Available for private wealth clients only
Variable performance fee
Minimum holding period
2 years
3 years
Holding period for tax advantages (required by the tax code)
7 years
What if I want to redeem earlier?
Before two years, you won’t be able to redeem. We institute a two-year lockup to encourage long-term investors to participate. Each pool is carefully weighted to achieve certain investment goals, and redemptions hurt your fellow investors.
After two years but before seven years, redemption requests are satisfied by distributing your original contribution back to you at a rate that is the lower of the contributed stock value at the time of redemption or the value of your fund shares based on the fund’s net asset value. The rest is retained until term commitments are met. Note that early redemptions incur a penalty fee. Please refer to the fund documents for a full set of redemption terms.
After seven years, you can redeem a diversified portfolio on a tax-deferred basis.
What if I want to redeem earlier?
What if I want to redeem earlier?
Before two years, you won’t be able to redeem. We institute a two-year lockup to encourage long-term investors to participate. Each pool is carefully weighted to achieve certain investment goals, and redemptions hurt your fellow investors.
After two years but before seven years, redemption requests are satisfied by distributing your original contribution back to you at a rate that is the lower of the contributed stock value at the time of redemption or the value of your fund shares based on the fund’s net asset value. The rest is retained until term commitments are met. Note that early redemptions incur a penalty fee. Please refer to the fund documents for a full set of redemption terms.
After seven years, you can redeem a diversified portfolio on a tax-deferred basis.
7 years
Minimum investment
$100k
Eligibility requirements
Accredited Investors
$200k+
income for the last 2 years
OR
$300k+
with spouse
OR
$1M+
net worth excluding primary residence
Fees
0.4% - 0.8% fee based on contribution
Zero sales fee or performance fee.
Dynamic discounts for certain stocks.
Ask your advisor about wholesale pricing, or avail referral discounts.
Minimum holding period
2 years
Holding period for tax advantages (required by the tax code)
7 years
What if I want to redeem earlier?
Before two years, you won’t be able to redeem. We institute a two-year lockup to encourage long-term investors to participate. Each pool is carefully weighted to achieve certain investment goals, and redemptions hurt your fellow investors.
After two years but before seven years, redemption requests are satisfied by distributing your original contribution back to you at a rate that is the lower of the contributed stock value at the time of redemption or the value of your fund shares based on the fund’s net asset value. The rest is retained until term commitments are met. Note that early redemptions incur a penalty fee. Please refer to the fund documents for a full set of redemption terms.
After seven years, you can redeem a diversified portfolio on a tax-deferred basis.
What if I want to redeem earlier?
What if I want to redeem earlier?
Before two years, you won’t be able to redeem. We institute a two-year lockup to encourage long-term investors to participate. Each pool is carefully weighted to achieve certain investment goals, and redemptions hurt your fellow investors.
After two years but before seven years, redemption requests are satisfied by distributing your original contribution back to you at a rate that is the lower of the contributed stock value at the time of redemption or the value of your fund shares based on the fund’s net asset value. The rest is retained until term commitments are met. Note that early redemptions incur a penalty fee. Please refer to the fund documents for a full set of redemption terms.
After seven years, you can redeem a diversified portfolio on a tax-deferred basis.
Minimum investment
$500k – $1M
Eligibility requirements
Qualified Purchasers
$5M+
in investments
Fees
1.5% – 2.25% overall annual fee
Upto 1.50%
sales fee
0.85% - 0.95%
management fee
Available for private wealth clients only
Variable performance fee
Minimum holding period
3 years
Holding period for tax advantages (required by the tax code)
7 years
The data for the key terms of other exchange fund providers are sourced from certain large institutional providers of exchange funds which Cache believes to be relevant competitors for its own exchange fund. However, key terms are not meant to be representative of any particular competitor or other provider of exchange funds. Cache makes no representation as to the accuracy of this information nor does Cache create an implication that such data has been updated as of any particular time from when such data was originally sourced.
Common questions
The basics
How does the Cache exchange fund work?
Eligibility
Is an exchange fund right for me?
BEnefits
Why should I choose Cache?
Getting started
What’s next if I choose to participate?
What's the main benefit of participating in a Cache Exchange Fund?
What are the investment goals of this fund?
Is there a taxable event after seven years? What will I receive, and what are the redemption fees?
What do you mean when you say your fund “approximates the Nasdaq 100”?
What happens when the stock I contribute to the fund goes up or down?
How are dividends and other income treated?
What tax considerations may come up while I’m in the fund? Is there an annual K-1?
Who can participate in the Cache Exchange Fund – and which stocks are accepted?
How is an Exchange Fund different from an ETF?
What if I don’t meet the minimum investment amount?
May I contribute stock for a company I work at? Can I contribute unvested equity?
What happens to my cost basis over the course of the fund?
How does the real estate investment work? What happens to it after seven years?
Do you rebalance the fund quarterly, like the actual Nasdaq 100?
How are investors protected if Cache is no longer viable?
Is the Cache Exchange Fund designed to improve my returns?
How does a Cache Exchange Fund compare to products from other providers?
How does the Exchange Fund help me avoid tax drag?
How does the Exchange Fund reduce my concentration risk?
How does Cache determine and charge fees?
How does the seven-year holding requirement compare to other providers?
Do you offer multiple funds, or is it one fund with different enrollment windows?
How does the reservation and formation process work?
How do you determine who gets an allocation and how big each fund is?
What happens when the fund closes?
Why do you institute a two-year lockup?
How do redemptions work before the seven-year mark? Are there any fees?
How do redemptions work once the fund “matures” after seven years? Are there any fees?
Can I transfer my shares in the fund shares or borrow against them? What are the details?