Section 351 conversions can provide a compelling path for investment managers and advisors seeking to transition appreciated securities into an ETF structure while potentially deferring capital gains recognition. But successful conversions require far more than tax planning alone.
From portfolio eligibility and regulatory considerations to operational readiness and launch execution, a Section 351 conversion demands careful coordination across fund sponsors, legal counsel, custodians, administrators, market makers, and authorized participants. The most successful conversions are approached as institutional fund launches—not simply tax-driven transactions.
This playbook provides a practical framework for evaluating, planning, and executing a Section 351 ETF conversion with confidence.
What You'll Learn
How Section 351 conversions work within an ETF structure
When a 351 conversion makes strategic and economic sense
Key eligibility, diversification, and structuring considerations
How to manage operational complexity across custodians, tax lots, and service providers
Best practices for governance, execution, and post-launch readiness
A Section 351 conversion can unlock the benefits of the ETF wrapper while preserving investor tax efficiency, but the process requires rigorous planning, disciplined execution, and the right operating model. Sponsors that approach the conversion strategically are better positioned to manage risk, streamline implementation, and support long-term ETF growth.
Download the playbook to gain practical guidance for navigating one of the industry's most sophisticated ETF launch strategies.