Case study

Cache helps Three Bell Capital turn tough conversations about risk into a growth opportunity

Steve Stroud

Senior Wealth Manager at Three Bell Capital

Three Bell Capital

• Website: three-bell.com
• Assets under management: $3.2B
• Location: San Francisco Bay Area

The Cache Exchange Fund helps turn a sticky situation into a major value add for one firm’s clients.

For many clients, a small position can unexpectedly balloon into a significant portion of their wealth.

"It’s a very good problem to have,” says Steve Stroud, the Senior Wealth Manager at Three Bell Capital. “It means that you've done something right – that either you invested well, or you worked for a great company for a long time and received a lot of equity compensation."

When he discovers concentration risk in a client’s portfolio, Steve Stroud tells his clients about The Cache Exchange Fund. "We bring it up during the first meeting," Stroud explains. "We like to bring it up as… a very powerful example of what they might not know about yet."

Cache Exchange Fund Review - Steve Stroud at Three Bell Capital - YouTube

Balancing Growth and Risk

In cases like the hyper-growth of NVIDIA, the consistent rise of Apple, or the repeated runups of Meta stock, Three Bell often sees client portfolios become unbalanced. "The stock has simply done so much better than markets that what wasn't a concentrated position suddenly has become one,” he says.

However, clients also remember downturns like those in 2022 and 2020, which prompt a critical question: How can they manage risk without sacrificing growth potential?

Stroud says Cache has been an effective talking point in these situations. "Cache has been a really well-received conversation starter. Very well-received tool," says Stroud. For Three Bell, Cache opens up opportunities to:

• Provoke thoughtful discussions and position Three Bell as a trusted thought leader.
• Demonstrate skill and value by introducing clients to a modern, tax-efficient solution.
• Help reluctant clients take action to reduce risk and continue on a growth trajectory.

A modern solution that finally works for clients

Traditional exchange funds often weren’t available to clients, and their broad market benchmarks weren’t as growth-oriented as Three Bell’s clients expected. "Going to what traditional exchange funds had offered, which was like going from a Lamborghini back to a Buick or something, was a difficult conversation," says Stroud.

Cache changes that narrative by allowing advisors like Stroud to:

• Engage Clients Proactively: "We like to have what we call our Contrary to Position Toolkit. On any introductory meeting, when we don’t quite know what the client’s real needs are… it’s a good starting point for the conversation, just to open up the kimono a little bit."
• Introduce a Compelling Growth Story: Cache is benchmarked to the Nasdaq-100, a growth-oriented index with more allocations for fast-growing tech companies: "While one company has been great one day, you don't know who the next leader is going to be. By benchmarking to that index… you’re going to be participating in that [upside] as well."
• Provide Simplicity and Efficiency: "The technological aspect of what Cache has brought to the table and simply the ease of operations has been a very powerful tool," says Stroud. "Doing so at an effective and reasonable cost… has been the biggest improvement we’ve seen in the space."

The outcome? More confident action.

Telling clients about The Cache Exchange Fund helps them set productive long-term goals while developing a clearer understanding of what their "destination portfolio" could look like. "It’s a delicate conversation,” says Stroud, but offering more effective alternatives helps position Three Bell as a forward-thinking advisor.

“Cache has been a very impactful and effective tool to solve those problems,” says Stroud. By helping clients reduce concentration risk and take steps to secure their future, Three Bell ensures they can focus on what matters most: living their lives with confidence and a strategy for the future.