351 Exchanges Demand 25% and 50% Diversification Rules
Diversification is a core requirement of a 351 exchange. Before assets can be contributed, the portfolio must satisfy specific IRS diversification tests. This video explains how those rules work in practice. The two key tests: The 25% Rule - No single security can represent more than 25% of the contributing portfolio. - Large, concentrated positions may need to be partially excluded. The 50% Rule - The combined weight of the five largest positions must remain under 50%. - Portfolios with fewer than approximately ten holdings often struggle to qualify. Additional considerations covered in the video: - ETFs are evaluated on a look-through basis - Overlap between ETFs and individual stocks matters - Cash and recently acquired government securities do not count toward diversification - Certain assets - including mutual funds, private assets, crypto, and derivatives, are ineligible Watch the video to see how diversification is evaluated before a 351 exchange. More detailed examples, visuals, and FAQs are available in the 351 Education Center: https://t.co/4grbMyITGm
DFA Leverages Section 351 After Exchange Fund Attempt
DFA entering the Section 351 game... https://t.co/ScNBQmXbwU A smart move after their attempt at an exchange fund.
Intangibles Outvalue Factories; Investors Must Adapt
Intangible assets—things like brand reputation, proprietary knowledge, and organizational capabilities—have become more valuable than physical factories and equipment...how are investors capturing this information? by @larryswedroe https://t.co/CW1mUsiweK https://t.co/Hu32LLmXw8
Rethinking Balanced Portfolios: Beyond Equity and Bond Premia
Traditionally, balanced portfolios rely on the equity and bond risk premia to generate returns. But is there a potentially better way? by @ebasilico https://t.co/dVYUQ1cXTI https://t.co/dSGBs4QvXo
NYC RIA Seeks Mid‑Level CIO with CFA Credentials
An RIA we've worked with over the years is actively looking to hire a CIO. Some of the specs are below: 1) Mid-level experience (5-10yrs) 2) NYC area 3) CFA/CIO-savvy and can chat with clients 4) Focused on investing and not advising DM/email if interested.
Limited Borrowing? Rethink Sharpe Ratio for Fund Selection
Selecting mutual funds is one of the most important jobs investors face. But using sharpe ratio may not be the answer if you have a limited ability to borrow. By @ebasilico https://t.co/x4TGFkaBHH https://t.co/d7tayubSd2
Submit by March 5 to Unlock Simplified, Tax‑Efficient US Equity ETF
Final Call: Advisors must submit portfolios & tax lot data by March 5 to participate in the launch of the Alpha Architect U.S. Equity 3 ETF (AAUA) Don’t miss the opportunity to: - Simplify complex client portfolios - Reduce tax friction through a...
ETF 351 Seeding Risks: Top 10 Mistakes Highlighted
Lots of chatter on ETFs being seeded via 351. Makes sense-we've seen a large increase in activity (and press e.g., @justinaknope @denitsa_tsekova). Here is an older article that talks about the top 10 ways to screw these up. https://t.co/pcyPnnrYtg Note: Economic substance...
Long‑horizon Investing Can Generate Its Own Alpha
For decades, long-term investing has been treated as a vague virtue rather than a distinct source of returns. Turns out long-horizon thinking may actually translate into its own source of alpha. by @ebasilico https://t.co/wIUJpxYujR https://t.co/d3aF2IAeAT