Being pitched by Fidelity to swap out of a large single stock exposure and avoid the large immediate capital gain. I am not really familiar with this, it sounds almost too good to be true, and I am wondering if there is any expertise on the pitfalls of doing this.

These are pretty sweet deals, if the particular stock is accepted into the fund. You do trade the market movement of your position for the basket, add a layer of cost, and then take the basket yield (less costs) vs. your own stock's yield.

Pretty much illiquid for the 7+ years. You don't improve basis (other than via reinvesting dividends and paying tax along the way), but you convert the basis from a concentrated stock to a the market risk basket.

Usually couple these with charitable and family giving, covered call writing, outright sells, and "forever hold" shares. Need to think through which tax lots go to which bucket, if you have varied lots.

I have experience with them and they are a good options for spreading the cap gains over a number of positions after the initial 7 yrs. Twenty percent of the fund is invested in real estate. I'm familiar with Eaton Vance and Goldman Sachs offerings. S&P 500 or S&P 1500 are options and are a reasonable way to diversity your concentrated stock.

Thanks to the both of you. It's starting to sound a lot more complicated than I thought. I'm glad I asked before I got myself in trouble.