Gabe Plotkin to Seed Snowball ETF via Tax-Deferred 351 Conversion
Gabe Plotkin plans to seed the new Snowball ETF with his personal portfolio through a 351 conversion, providing the initial securities to launch the fund. The structure allows transfer of assets with embedded gains into an actively managed, concentrated equity ETF overseen by Plotkin this year or early 2027.
1. ETF Creation via 351 Conversion
Gabe Plotkin will provide the majority of initial securities for the Snowball ETF by converting his personal portfolio through a tax-efficient 351 exchange. The fund’s filing indicates an actively managed, concentrated equity strategy overseen by Plotkin as founder and CIO of Snowball Advisors LLC. The ETF is expected to launch later this year or in early 2027.
2. Tax Advantages of 351 Conversion
The 351 conversion allows holders to transfer assets with embedded gains into an ETF without triggering immediate capital gains taxes. This method enables ongoing portfolio rebalancing and liquidity within the ETF structure while deferring tax liabilities. Wealthy investors have increasingly adopted this tactic as an alternative to direct asset sales.
3. Implications for Wealth Managers
Plotkin’s move underscores a growing trend among high-net-worth individuals and hedge fund managers to shift strategies into ETFs for tax efficiency and liquidity. The concentrated equity approach may attract investors seeking active management with potential tax benefits. Other managers may follow suit if the Snowball ETF performs successfully post-launch.