Exchange Funds (Swap Funds): Diversifying Without Selling

/* [BMT Product Standard: Score 9.0 | Inherited Final v1.2] */ .bmt-wrapper { /* 디자인 토큰 */ –bg-body: #0F172A; –bg-card: #1E293B; –bg-glass: rgba(255, 255, 255, 0.03); –text-primary: #F1F5F9; –text-muted: #94A3B8; –accent-gold: #F59E0B; –accent-gold-dim: rgba(245, 158, 11, 0.1); –border-subtle: #334155; –shadow-card: 0 20px 25px -5px rgba(0, 0, 0, 0.3); /* 레이아웃 */ background: var(–bg-body); padding: 50px 40px; border-radius: 12px; box-shadow: var(–shadow-card); font-family: -apple-system, BlinkMacSystemFont, “Segoe UI”, Roboto, “Helvetica Neue”, Arial, sans-serif; color: var(–text-primary); line-height: 1.7; max-width: 800px; margin: 20px auto; border: 1px solid var(–border-subtle); } /* 타이포그래피 */ .bmt-wrapper h1 { font-family: “Georgia”, serif; font-size: 2.5rem; line-height: 1.2; color: var(–text-primary); margin: 0 0 20px 0; letter-spacing: -0.02em; } .bmt-wrapper h2 { font-family: “Georgia”, serif; font-size: 1.75rem; color: var(–accent-gold); margin-top: 50px; margin-bottom: 20px; } .bmt-wrapper h3 { font-size: 1.1rem; font-weight: 700; color: var(–text-primary); margin: 0 0 10px 0; letter-spacing: 0.05em; text-transform: uppercase; } /* 요소 디자인 */ .bmt-header { margin-bottom: 40px; } .bmt-badges { margin-bottom: 15px; font-size: 0.75rem; font-weight: 700; letter-spacing: 0.05em; text-transform: uppercase; color: var(–text-muted); } /* [Safety] Meta Layout */ .bmt-meta { font-size: 0.9rem; color: var(–text-muted); display: flex; gap: 15px; margin-bottom: 25px; flex-wrap: wrap; row-gap: 6px; } .bmt-divider { height: 2px; background: linear-gradient(90deg, var(–accent-gold) 0%, transparent 100%); margin-bottom: 30px; opacity: 0.7; } /* 박스 시스템 */ .box-gold { background: var(–accent-gold-dim); border: 1px solid var(–accent-gold); padding: 25px; border-radius: 8px; margin: 30px 0; } .box-glass { background: var(–bg-glass); border: 1px solid var(–border-subtle); padding: 20px; border-radius: 8px; margin: 30px 0; } .box-alert { background: rgba(248, 113, 113, 0.1); border-left: 4px solid #F87171; padding: 20px; margin: 30px 0; color: #FCA5A5; } /* 링크 박스 */ .box-link { background: var(–bg-card); border: 1px solid var(–border-subtle); padding: 25px; border-radius: 8px; margin-top: 60px; box-shadow: 0 4px 6px -1px rgba(0, 0, 0, 0.1); } .box-link a { display: block; color: var(–text-muted); text-decoration: none; padding: 8px 0; transition: color 0.2s; border-bottom: 1px solid rgba(255,255,255,0.05); } /* [Safety] Hover Visibility */ .box-link a:hover { color: var(–accent-gold); border-bottom-color: var(–accent-gold); } .box-link a:last-child { border-bottom: none; } /* 차트 (강제 고정) */ .bmt-chart { background: var(–bg-card); border: 1px solid var(–border-subtle); padding: 25px; border-radius: 12px; margin: 40px 0; position: relative; } .chart-label { position: absolute; top: -10px; left: 20px; background: var(–bg-body); padding: 0 10px; color: var(–accent-gold); font-size: 0.75rem; font-weight: 800; text-transform: uppercase; letter-spacing: 1px; } .chart-row { margin-bottom: 20px; } .chart-head { display: flex; justify-content: space-between; font-size: 0.9rem; margin-bottom: 8px; color: var(–text-primary); } .chart-track { background-color: #334155 !important; height: 24px; border-radius: 4px; overflow: hidden; border: 1px solid #475569; width: 100%; display: block; } /* [Safety] Text Contrast */ .chart-fill { height: 100%; display: flex; align-items: center; justify-content: flex-end; padding-right: 10px; color: var(–bg-body); font-size: 0.75rem; font-weight: 800; box-sizing: border-box; } /* 테이블 */ .bmt-table { width: 100%; border-collapse: collapse; margin: 30px 0; font-size: 0.95rem; } .bmt-table th { border-bottom: 2px solid var(–border-subtle); color: var(–accent-gold); padding: 12px; text-align: left; } .bmt-table td { border-bottom: 1px solid var(–border-subtle); padding: 12px; color: var(–text-primary); } /* Slogan */ .bmt-slogan { text-align: center; margin-top: 40px; font-size: 0.8rem; color: var(–text-muted); opacity: 0.6; letter-spacing: 1px; text-transform: uppercase; } /* Tracker (Hidden) */ #bmt-article-tracker { display: none; } /* 모바일 */ @media (max-width: 600px) { .bmt-wrapper { padding: 30px 20px; } .bmt-wrapper h1 { font-size: 1.8rem; } .bmt-divider { margin-bottom: 20px; } }
Tax Tips / Concentrated Stock

Exchange Funds (Swap Funds): Diversifying Without Selling

By Team BMT Jan 11, 2026

💡 Executive Summary

  • Problem: You hold a massive position in one stock (e.g., Apple, Amazon) with zero cost basis. Selling to diversify triggers a 23.8%+ tax bill.
  • Solution: Contribution your shares to an “Exchange Fund” (Partnership). You pool shares with other investors.
  • Result: You exchange your single stock for a diversified basket of shares tax-free (after a 7-year hold).
⚠️ THE 7-YEAR LOCKUP
This is a long game. To satisfy IRS rules, you must stay in the fund for at least 7 years. If you exit early, the tax protection fails. This strategy is for “Wealth Preservation,” not “Active Trading.”

“Concentration builds wealth; diversification preserves it.” The Exchange Fund is the bridge between these two stages. It allows Qualified Purchasers (Tier L3+) to de-risk their portfolio without volunteering a 30% haircut to the IRS.

🧐 Core Mechanic: The “Potluck”
Imagine a dinner where everyone brings one dish. You bring 100% Steak (Apple Stock). Someone else brings 100% Potatoes (Google). At the end, everyone leaves with a balanced plate. Since it’s a “Partnership Contribution” (IRC § 721), no sale occurred.

Performance Simulation

Diversification Cost ($10M Position)
Sell & Reinvest ~$2.4M Tax Bill Paid
$7.6M Working Capital
Exchange Fund $0 Tax Paid (Deferred)
$10.0M Working Capital

Comparison: Direct Sale vs. Exchange Fund

Factor Direct Sale Exchange Fund
Tax Impact Immediate (23.8%+) Deferred (0% Today)
Liquidity Instant (Cash) Low (7-Year Hold)
Diversification Immediate Immediate (Pooled)
“It’s not about timing the market; it’s about time in the market—with the government’s money. An Exchange Fund lets you keep the tax liability invested for your benefit.”
BMT designs for tax reality, not theory.