exchange fund

(redirected from Swap Funds)
Also found in: Wikipedia.

Exchange fund

Investment vehicle introduced in 1999 that appeals to wealthy investors with large holdings in a single stock who want to diversify without paying capital gains taxes. These funds allow investors to exchange their stock for shares in a diversified portfolio of stocks in a tax-free transaction.

Exchange Fund

An investment vehicle allowing investors with large holdings in a single stock to exchange them for a diversified portfolio. This allows the investors to diversify their holdings without selling any stocks, thereby avoiding taxes on their capital gains until the shares are actually sold. Exchange funds are controversial as investors could avoid taxes completely by never selling the portfolio and simply borrowing against it. They were originally introduced in 1999. An exchange fund is also called a swap fund.

exchange fund

An open-end investment company that swaps its own shares for an equal value of securities owned by an individual investor. Although the exchange is tax-free, the fund assumes the stockholder's basis on the securities it obtains. Thus, exchange funds ordinarily have large potential capital gains liabilities. Because of a 1967 Internal Revenue Service ruling, shares of these funds are no longer offered.
Mentioned in ?
References in periodicals archive ?
Contract Awarded for Admin change, swap funds to other clins
The apex bank said that the window would allow it to swap funds mobilised through foreign currency deposits to attract overseas funds.
into by the Company on behalf of each of the Swap Funds with Credit
subject which will affect the Net Asset Value of the Swap Funds as of
Of particular concern to Congress was the reappearance of so-called swap funds, which are partnerships or RICs that are structured to fall outside the definition of an investment company, thereby allowing contributors to make tax-free contributions of stock and securities in exchange for an interest in an entity that holds similar assets.
In the last two years private swap funds from a number of major Wall Street institutions have squeezed through that loophole.
Known also as an exchange fund or a diversification fund, a swap fund uses partnership tax breaks to help wealthy investors diversify their assets without paying capital-gains taxes.
Thereafter, syndicated swap funds involving partnerships prompted Congress to
I am surethat the currency swap arrangement between the two countries would be an important stepping stone in balancing the strength of bilateral ties between the real and financial sectors, leading to ever closer economic cooperation, said Bank of Korea Governor, Dr Choongsoo Kim, The two central banks have agreed to work together to achieve this goal, bringing about tangible outcomes, such as the use of currency swap funds in local currency trade settlement.
Implementation Date"), each of the Swap Funds will avail of the
Date to the Swap Implementation Date, the Swap Funds will continue to
the custody fees incurred by the Swap Funds for the safekeeping of the