Interval funds offer investors a way to diversify their portfolios with assets like real estate, private equity, and debt instruments, but they come with unique features. Unlike mutual funds, interval funds allow for liquidity only at specific intervals, such as quarterly or annually, rather than daily.
This limited liquidity provides fund managers with greater flexibility in choosing investments. Despite their higher fees and limited redemption opportunities, interval funds are growing in popularity, especially among those nearing retirement, due to their potential for steady returns from less liquid assets.
Investors should be aware of the fund's redemption process, minimum investment requirements, and the varying performance of these funds. Firms like KKR and Capital Group plan to launch interval funds.
Finsum: Liquidity concerns are real, but relaxing this constraint lets opportunities blossom.
- interval funds
- liquidity
- diversification
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