My first paper on seeding ETFs with appreciated assets, co-authored with Elie Rozner, titled "Managing Concentrated Public Stock Positions by Seeding an Exchange-Traded Fund," was just published in the Journal of Wealth Management.
I'm working with another co-author on a new paper where we break the seeded ETFs into cohorts and learn some interesting things about costs and embedded gains. The first draft will be out in a few weeks.
If this is the first you're hearing about IRC Section 351, the mechanism used to avoid immediately recognizing capital gains when seeding an ETF, welcome.
Read this to get up to speed. Quick FAQs... 1) No, it is not the same as an exchange fund. 2) Yes, you must already be diversified.
For the new paper, I expanded the universe to include mutual fund conversions, partial conversions, and a few hedge fund conversions, and found 113 ETFs seeded with private wealth assets via Section 351.