New ETF Launch With Seed Assets Using A 351 Exchange
For new ETF issuers, gathering substantial seed assets is often a challenging task. However, Section 351 of the Internal Revenue Code presents a unique opportunity to help issuers launch with significant Assets Under Management (AUM) while offering tax advantages to investors. This mechanism allows investors, particularly those with appreciated, low-basis assets, to contribute their holdings […]
Understanding the Complexities of Section 351 Exchange
A 351 exchange, under Section 351 of the Internal Revenue Code, allows for tax-free transfers of assets into an investment company, such as an ETF. While this structure offers significant tax advantages, navigating a 351 conversion requires careful planning to avoid common pitfalls. Key Challenges in a 351 Exchange Diversification Requirements: To qualify as a […]
351 Exchange vs. 351 Conversion: Which Term is Correct?
When discussing the strategic move of investment portfolios, such as Separately Managed Accounts (SMAs), into the efficient structure of an Exchange Traded Fund (ETF) without triggering immediate tax liabilities, you’ll often encounter two key phrases: 351 exchange and 351 conversion. You might wonder if these are different processes that commonly get confused like Exchange Fund […]