Cache, a fintech company that offers specialized products for managing large and concentrated stock positions for individuals and their advisors, announced that it crossed $300 million in assets under management (AUM). Reached within only ten months of their launch, the milestone reflects Cache’s rapid growth and commitment to democratizing access to advanced financial instruments, starting with its modern exchange funds.
Launched in March 2024, the Cache Exchange Funds have gained significant traction by broadening access, lowering fees and minimums, and providing faster, more efficient diversification.
As of the end of last year, Cache Exchange Funds had reached over $300 million in gross assets, allowing investors to defer more than $200 million in capital gains. Some key performance highlights from 2024 include:
— All three Cache Exchange Funds, which are benchmarked to the Nasdaq-100® Index, delivered noteworthy outperformance relative to the benchmark, exceeding it anywhere from 7.9% to 10.7%, as these portfolios held more of the top 25 performers and less of the bottom 25 performers in the index.
— Cache Exchange Funds maintained a realized tracking error of 3.7%-3.8% against the Nasdaq-100, which indicates disciplined execution and a deep focus on risk management.
— Cache Exchange Funds outperformed the Nasdaq-100 in absolute returns and risk-adjusted performance, as demonstrated by higher Sharpe ratios. For example, Cache Exchange Fund I (the oldest exchange fund recorded a Sharpe ratio of 1.38 relative to 1.03 for the Nasdaq-100. (higher is better)
KEY QUOTES:
“Crossing the $300 million threshold in short order reaffirms that our solution addresses a real challenge for many people. For investors with large concentrations of a single stock, the traditional options were limited: hold and bear too much risk, or sell and face significant taxes. Cache Exchange Funds have enabled an efficient approach to stock diversification, making advanced strategies more accessible to a wider audience.
”Cache’s modern exchange funds were created to tackle the challenges of equity concentration by enabling investors to diversify their holdings without triggering immediate capital gains taxes. Traditionally, exchange funds were reserved for the ultra-wealthy, requiring significant minimums and high fees. Cache has reimagined this antiquated model with lower minimums, competitive fees, and a direct-to-consumer approach, which has attracted a diverse client base that includes early-career professionals, C-suite executives, and family offices.“
“We are committed to leveling the playing field and providing more investors and advisors with access to these powerful financial tools. Our approach combines rigorous portfolio construction using quantitative and qualitative overlays and balancing the supply of stocks investors are looking to diversify. Since launch, we’ve delivered our clients strong performance, meaningful tax savings, and reduced concentration risk.”
– Srikanth Narayan, founder and CEO of Cache
