| Thought Leadership Product Enhancement
Exchange Fund Replication
Many investors have concentrated stock positions, and Exchange Funds have frequently been used to diversify exposures without triggering a tax bill. SRA has developed Exchanged Fund Replication to provide the same risk swap from a single stock into a diversified basket, and has improved upon traditional exchange funds by:
1. Increasing liquidity – daily liquid SMA vs. Limited Partnership with lockup.
2. Increasing transparency – exposures to Advisor’s choice of indices vs. a basket of what other investors contribute.
3. Increasing inclusivity – no accreditation requirement vs. Qualified Purchaser standard.
4. Reducing leverage – maximum 100% risk replacement vs. forced 20% leverage into private real estate.
5. Reducing fees – passing through fee savings to be low cost provider vs. embedded fund structure costs.