exchange fund


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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.
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A spokesman for the Hong Kong Monetary Authority said the increase reflected mainly the valuation effect of foreign currency investments held by the Exchange Fund.
Hong Kong: The Hong Kong Monetary Authority (HKMA) announced today (Tuesday) that additional Exchange Fund Bills will be offered in the tenders on 5, 12, 19 and 26 April 2016 totaling HK$20,000 million, to meet the increased demand for the paper by banks given the abundance of liquidity in the banking system.
The Foreign Exchange Fund Special Account incurred a deficit of 2,263.3 billion yen at the end of September, according the receipts and payments of Treasury funds with the private sector.
Hong Kong: The Hong Kong Monetary Authority (HKMA) announced today (Monday) that the total assets of the Exchange Fund amounted to HK$3,527.4 billion as at 31 January 2016, HK$98.5 billion higher than that at the end of December 2015.
Hong Kong: The Hong Kong Monetary Authority (HKMA) released today (Monday) the key analytical accounts of the Exchange Fund at the end of January 2016.
Global Banking News-27 April 2010-HKMA to sell additional HKD19bn exchange fund bills in May(C)2010 ENPublishing - http://www.enpublishing.co.uk
Global Banking News-10 March 2010-HKMA to sell HKD18bn additional exchange fund bills in March(C)2010 ENPublishing - http://www.enpublishing.co.uk
Hong Kong: At end-December 2015, the Hong Kong Monetary Authority (HKMA) published the unaudited financial position of the Exchange Fund.