Series 7: 6.2.2 Interval Funds

6.2.2 Interval Funds 

An interval fund is a type of closed-end fund that invests in illiquid assets such as real estate, private placements, and below-investment grade debt. By investing in less liquid assets, an interval fund may be able to offer higher returns and returns that may be less correlated with publicly traded securities. But interval funds limit shareholders from selling their shares to specific periods (“intervals”) and in limited quantities.

Recall that shares of a typical closed-end fund are issued in a public offering and then traded at a price that may be at a discount or at a premium to net asset value (NAV). Interval funds, however, are not traded on an exchange or secondary market, instead interval funds sell their shares directly to investors at the fund’s NAV, like a open-end mutual fund. And, also like a mutual fund, interval fund investors who want t