2026 Launch

Transition Concentrated Stock Positions Into a Diversified ETF

The planned Rareview 351 Exchange ETF is designed to help eligible investors move from appreciated equity exposure toward diversified ETF ownership while deferring, not eliminating, embedded capital gains.

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Concentrated Positions

Appreciated securities and tax lots

Section 351 Contribution

Eligibility, structure and launch requirements apply

Diversified ETF Ownership

Public-market vehicle with daily pricing

Is This Situation Familiar?

Many investors want to reduce single-name risk, but selling appreciated positions can create an immediate tax event

Your client owns

  • Appreciated stock
  • Highly concentrated positions
  • Low-cost-basis holdings

They want

  • Broader diversification
  • Tax-aware transition
  • A long-term allocation solution

But they worry about

  • Capital gains taxes
  • Selling too quickly
  • Losing flexibility

A Different Path Forward

Subject to portfolio eligibility and applicable legal and tax requirements, approved securities may be contributed at fund formation in exchange for shares of a newly launched ETF

Portfolio Review

Rareview reviews holdings, tax lots, liquidity, security type and concentration.

Eligibility Assessment

The team evaluates contribution composition and diversification thresholds.

ETF Contribution

Approved securities are contributed at launch in exchange for ETF shares.

Diversified Ownership

Investors hold ETF shares and assume the fund’s strategy, fees and market risk.

Traditional Sale vs. Rareview Capital 351 ETF

A 351 exchange may provide another path for eligible investors seeking diversification without forcing an immediate taxable sale.

Consideration Traditional Sale Rareview 351 ETF
Current tax effect Gain generally realized immediately Intended deferral if contribution qualifies
Liquidity profile Cash available after sale ETF shares trade in the secondary market
Primary trade-off Reduces risk but crystallizes tax Basis carries over; ETF market risk and eligibility rules remain

Why Advisors Are Exploring 351 ETFs

Tax-Aware Transition

May defer capital-gains recognition at contribution rather than force an immediate taxable sale.

Diversification

Replaces narrow issuer or sector exposure with a broader portfolio aligned to the fund mandate.

ETF Liquidity

Public-market format with daily pricing, standard custody and secondary-market tradability.

Professional Management

Investors transition into an actively managed ETF strategy rather than remaining in legacy holdings.

Estate Planning Relevance

Under current law, heirs generally receive a basis adjustment if shares are held until death.

Institutional Implementation

Process-driven review of holdings, capacity, documentation and launch timing.

Potential Fit

Participation depends on the composition of the contribution basket. Not all single-stock or highly concentrated positions will qualify on a standalone basis.

Often Appropriate For

  • Appreciated taxable portfolios
  • Investors overly exposed to a narrow set of stocks or sectors
  • Clients seeking a public-market vehicle rather than a private structure
  • Families coordinating diversification with wealth-transfer planning

May Be Less Suitable For

  • Investors who need immediate cash proceeds
  • Holders whose assets cannot satisfy eligibility rules
  • Investors seeking guaranteed tax elimination
  • Investors seeking principal protection or guaranteed liquidity

Indicative Launch Process

A streamlined path from preliminary holdings review to contribution at fund launch.

Submit Holdings

Preliminary holdings file and tax-lot summary.

Eligibility Review

Review contribution eligibility and fit with the ETF mandate.

Scenario Discussion

Discuss embedded gain profile, capacity and timing.

Documentation

Complete commitment and required documentation.

ETF Launch

Eligible contribution occurs at fund launch.

Next Step

Request Early Access

Rareview Capital is currently reviewing preliminary holdings files and tax-lot summaries for prospective launch participants. Initial review should focus on contribution eligibility, embedded gain profile and fit with the ETF mandate.

Disclosure: For discussion purposes only. This material does not constitute tax, legal, accounting, or investment advice and is not an offer to sell or a solicitation of an offer to buy any security. The anticipated tax treatment of a Section 351 exchange depends on the investor’s facts and circumstances, portfolio composition, fund structure, and satisfaction of applicable legal and tax requirements. Investors should consult their own tax, legal, and financial advisers. An investment in the Fund will involve risk, including possible loss of principal. ETF shares may trade at prices above or below net asset value and may have varying levels of secondary-market liquidity. Tax deferral is not tax elimination; basis carries over and selling ETF shares generally triggers recognition of embedded gain.