Cache Reinvents the Exchange Fund with ETF Rebalancing in New S&P 500 Fund

Today, Cache is proud to announce one of the most significant evolutions in exchange funds since they were created more than 70 years ago. Our newest fund, benchmarked to the S&P 500, will fundamentally change how exchange funds are built, reinventing them for today’s markets.

With this launch, tax-efficient diversification becomes even more accessible, predictable, and affordable for those holding highly appreciated assets—especially for tenured employees across corporate America who often hold 30–95% of their wealth in a single stock.

This fund will build on our early breakthroughs. Cache launched just over a year ago with exchange funds benchmarked to the Nasdaq-100, making tax-deferred diversification available to a broader set of investors. We’ve since scaled to over $400 million in assets, underscoring the demand for tax-efficient diversification after a historic bull run.

We’re now expanding the Select Fund Series, giving qualified investors greater choice based on their investment goals, all at the same low-fee structure:

• S&P 500: Broad U.S. Market – The Foundational Exposure
• S&P 500 Growth: Broad Large-Cap Growth – The Disruption Exposure
• Nasdaq-100: Large-Cap Growth with Tech Focus – The Innovation Exposure

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The job titles and companies mentioned are for illustrative purposes only and are not endorsements but examples of the types of investors in the Cache Exchange Fund.

The power of diversifying with exchange funds

Wall Street giants have offered exchange funds for more than half a century – it is an effective way to diversify concentrated stock positions without triggering immediate capital gains taxes. Exchange funds take single stocks from multiple investors and pool them, allowing each investor to diversify their holdings. Since 100% of your capital is invested pre-tax, your investment can ideally compound faster while greatly reducing your concentration risk.

But while the core idea is powerful, traditional exchange funds come with real drawbacks: 

• Unpredictable capacity with potentially long wait times
• High minimums and high fees
• Limited access through private wealth channels
• Manual and complex onboarding processes

Cache set out to change that.

A Reinvention of the Exchange Fund

By rebuilding exchange funds from the ground up, we tried to solve one of the most persistent issues with exchange funds – predictability. 

Our proprietary approach offers investors and their advisors transparency and predictability around key issues like capacity, fund performance, and fees, elevating exchange funds as a key tool in capital gains planning. 

Legacy Providers Not Meeting Investor Needs

Ask any advisor or investor who has worked with traditional exchange funds, and you’ll hear a familiar story: they reach out to check capacity for a particular stock, only to get a “no” most often. Eventually, they stop asking.

That’s because legacy funds often struggle with supply-demand mismatches. To track broad indices like the S&P 500, a fund needs stocks from across all sectors. While plenty of investors hold appreciated shares in technology stocks, it’s far harder to source appreciated stocks from sectors like materials or utilities. 

Looking at the S&P 500’s performance over the past two decades, the growth has been concentrated in a few key sectors. That’s precisely where demand for diversification is highest—and where legacy funds have struggled to meet the demand.

Meanwhile, with little competition, traditional providers have remained static: hard to access, high fees, high minimums, and antiquated onboarding.

Index Sync – Breakthrough Rebalance Technology

As noted, traditional exchange fund structures quickly run into supply-demand imbalances—an issue that becomes more pronounced with broad indices like the S&P 500. The result? A marketplace where supply-demand equilibrium is hard to reach, constantly disappointing one side or the other.

ETFs, by contrast, are built to adapt. They can rebalance daily to track their benchmark with precision, and they can do it tax-efficiently. That prompted the question: What if we could bring ETF-style rebalancing into the exchange fund model?

With Index Sync, we’ve done exactly that. It’s a technical breakthrough that combines the tax-deferred benefits of an exchange fund with the tax-efficient rebalancing of an ETF.

The result is an exchange fund that is built to offer greater capacity than traditional exchange funds, tighter tracking goals, and faster diversification, even when benchmarked to a broad-based index like the S&P 500.

To execute on the structure, we’re partnering with Alpha Architect—a research-led ETF innovator founded by Dr. Wesley Gray, that manages $15B in assets and operates a platform for launching new ETFs.

“This is a fundamental shift in how concentrated wealth gets managed. Traditional exchange funds were built for a very narrow audience. What Cache has built isn’t just an upgrade—it’s a reinvention. Exchange funds have been reimagined as something every concentrated stockholder should consider.”
- Wesley Gray, Ph.D., Founder and CEO of Alpha Architect

How the New S&P 500 Exchange Fund Works

For an investor, everything remains familiar – they contribute their stocks and receive shares in a diversified fund. Their investment benefits from pre-tax compounding.

Behind the scenes, our Investments team analyzes the incoming portfolio once investors are onboarded. We carve out a portion that will be rebalanced with exposure to shares in an ETF targeting the S&P 500, while the rest remains in the fund. By carefully optimizing this balance, Index Sync enables us to offer higher capacity, tighter tracking goals, and faster diversification than legacy structures.

An added benefit: when investors withdraw from the fund, they can receive ETF shares rather than a narrow basket of stocks.

Announcing Even Lower Pricing

Cache Exchange Funds now offer:

✅ Broad exposures like the S&P 500 with tighter tracking goals
✅ Higher capacity with greater predictability
✅ Biweekly closes for faster diversification
✅ Streamlined onboarding with white-glove support

And with greater efficiency comes better pricing. Here are the details:

- Management fees as low as 0.40% annually, which includes 0.15% for ETF fees. 

- There are no sales commissions or other distribution fees.

- After completing seven years, the management fee drops to 0.25%, helping to maximize the value of tax-deferred diversification.

- Advisory firms also receive wholesale discounts on management fees. 

Onboarding Now for June 30th Close

Cache’s new funds are now onboarding. Our first close is set for June 30, 2025.

👉 Check if you qualify
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‍👉 Learn more on a webinar
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👉 Talk to our team 1:1
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We look forward to helping you take the next step in managing your large stock positions.

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