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Most of the exchange fund investors are longtime shareholders, including heirs of families that own large stakes in a single company.
Brokers who sell Eaton Vance funds are paid 2percentt of the value of shares their clients contribute to the exchange fund.
Because most clients stay in an exchange fund for seven years the broker and his firm stand to collect at least 3.75percentt of his client's account.
WALL STREET JOURNAL New Foreign Exchange Fund Said to Launch | Stephen Jen, a foreign exchange strategist, plans on Tuesday to start a London-based hedge fund called SLJ Macro Partners, with about $220 million under management, The Financial Times reports.
Goldman gave Mr. Romney's trusts access to the bank's own exclusive investment funds and helped him execute an aggressive and complex tax-deferral strategy known as an "exchange fund" in 2002.
As for Dr. Waksal's trades, the company said that on Oct. 25, Dr. Waksal withdrew 51,532 shares from an exchange fund, a kind of mutual fund that allows executives to invest with their stock rather than cash.
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Exchange funds have been around for decades.
It is the same with Vanguard and exchange funds.
Eaton Vance sells its exchange funds under similar names.
Another advantage of exchange funds is tax efficiency.
Because all exchange funds are index funds, they threaten Vanguard most.
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