At ExchangiFi, we’re building a platform that connects investors, advisors, and ETF issuers—making it easier than ever to participate in Section 351 tax-deferred exchanges. These exchanges allow investors to diversify concentrated portfolios into newly launched ETFs without triggering an immediate capital gains tax.
Why 351 Exchanges Matter
A highly concentrated portfolio can create significant volatility, one of the biggest risks investors face. By contributing securities into a new ETF through a 351 exchange, investors can reduce concentration risk, gain diversification, and defer capital gains taxes.
How It Works
- Diversification Rules – Contributed baskets must meet strict diversification standards:
- No single position can exceed 25% of the basket’s market value.
- The top 5 positions together cannot exceed 50%.
- ETFs are evaluated on a “look-through” basis, meaning underlying holdings are considered.
- Eligible Securities – Stocks, ETFs, bonds, and closed-end funds qualify as long as they are liquid. (Cash doesn’t count.)
- Fund Alignment – Contributions must match the ETF’s investment strategy. For example, an emerging markets ETF cannot accept U.S. large-cap stocks—though actively managed funds are far more flexible.
Tools for Investors & Advisors
Our platform makes participating in a 351 exchange seamless:
- Portfolio Calculator – Test if your holdings meet diversification requirements.
- Exchange Calculator – Upload a spreadsheet or enter positions manually to see tax deferral amounts and optimized baskets.
- Advisor Dashboard – Create client-specific portfolio conversion plans, securely manage data (SOC 2 compliant), and prepare for ETF launches.
The software even accounts for tax lot-level detail and automatically maximizes the tax deferral benefit while ensuring compliance with diversification rules.
Timing Is Critical
351 exchanges only occur before an ETF launches. Issuers typically have a 3–4 month window to meet with investors, gather interest, and finalize contributions. Once completed, investors receive ETF shares in their brokerage accounts—fully liquid, with the original cost basis preserved.
Get Started with ExchangiFi
On our homepage, you’ll find featured deals from ETFs preparing to launch. Click to learn more, connect with issuers, and explore live opportunities.
Whether you’re an investor, advisor, or ETF issuer, ExchangiFi makes it simple to navigate 351 exchanges and unlock smarter, tax-efficient diversification.
👉 Register today to see live deals, test our calculators, and explore the future of ETF investing.
