Why Interval Funds are a Sound Investment Strategy

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Net Asset Value

Unlike a traditional closed end fund that is traded on a market bid ask basis, closed end interval funds trade at net asset value, so there is no discount to market risk that is typical among closed end funds.

Assets in an Interval Fund

A lot of investors are attracted to interval funds because they are less subject to restrictions on the amount of illiquid  investments in the fund. This gives the retail investor the opportunity to participate in a more diverse type of investment in a manageable size.

A typical investor cannot invest in commercial real estate, oil and gas exploration partnerships, or private debt securities.  Many of those same investors are not eligible to participate in private funds reserved for accredited or qualified investors. Interval funds allow individual investors with relatively modest means to take advantage of these sound investments. Most interval funds do require a relatively significant investment to buy in – typically somewhere in the $10,000 to $25,000 range. This still pales in comparison to a direct investment in any of these classes of securities.