Interval funds

Interval funds

Today’s historically low yields and uncertain outlook for stocks has many investors questioning how they will reach their financial goals. The good news is that investors have far more options than they may realize.

Investing in private markets and less-liquid areas of the fixed income market may provide an alternative source of income, growth and portfolio diversification. But how can individuals access these markets?

An interval fund is a type of closed-end fund that pools investors’ assets to invest in a wide range of securities. Interval funds are ideal for investing in private markets and less-liquid areas of the fixed income market, as the fund structure matches the illiquid and less-liquid attributes of these markets.

Watch the Interval Funds video for answers to some key questions on this topic:

  • What is an interval fund?
  • How does an interval fund compare to a mutual fund?
  • Why does the liquidity of a fund matter when investing in private markets and less-liquid areas of credit markets? 
  • What is the “illiquidity premium” and how can investors access it?

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Investor considerations

Interval funds provide limited liquidity with no guarantee that an investor will be able to redeem their shares during a given redemption period. Because selling opportunities are restricted, an interval fund should be considered a long-term investment.

When investing in interval funds, financial professionals and their investors should first consider the individual’s financial objectives. Investment constraints such as risk tolerance, liquidity needs and investment time horizon should be taken into consideration.

Learn more

Read about the interval fund structure and how the illiquidity premium works.

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