What are Interval Funds
- Interval Funds are an investment vehicle available to sophisticated investors (either accredited investors or those who work with a Registered Investment Advisor) that are similar to mutual funds but only allow investors to redeem their investment quarterly.
- The lower liquidity profile allows the managers of the Interval Funds to invest in less liquid / institutional asset classes such as private real estate, private debt, or venture capital.
What makes Interval Funds so attractive?
- Stable, consistent returns
- Income generation: 5-10% dividend yields paid quarterly
- Low volatility
- Low correlation to public equities and fixed income markets
- Access to institutional and private assets
- Attractive alternative to bonds as well as equities
Results / Performance
Resilience During Volatile Markets
- One of the most attractive features of these select interval funds is their resilience during volatile markets. During the past three major stock market drawdowns these funds proved remarkably resilient, often declining just a few percent, compared to 20-30% declines for the S&P 500.
- The Covid Crisis in March of 2020 saw the S&P 500 decline 35% from peak to trough. During that same time period, one of the most acute periods of market stress ever, our three select Interval Funds barely declined at all. Had an investor included these investments in their overall portfolio they experienced much less volatility.
Source: Bloomberg
- 2022 is off to a very rocky start for stock and bond markets. Select Interval Funds have delivered steady and consistent returns without any of the volatility experienced in global stock and bond markets despite a host of challenging factors (Russia-Ukraine war, rising interest rates, high inflation).
Source: Bloomberg
- 2018 saw the S&P 500 decline nearly 20% as the Federal Reserve began to raise interest rates and the US-China trade war heated up. Select Interval Funds rode through the storm with no volatility and produced strong returns.
Source: Bloomberg
Select Interval Fund Roster
Conclusion – Interval Funds are Essential to a Diversified Portfolio
Interval Funds are a powerful addition to investor portfolios, especially in today’s volatile stock market where safety and yield is tough to come by. Of course, not all Interval Funds are created equal – there are good funds and bad funds. At Athos Capital Advisors we are a multi-asset class investor and specialize in selecting the very best funds for our clients. We believe these funds right now offer investors some of the best risk/reward in today’s market environment; offering investors a combination of high income paid as dividends, very low daily volatility, and 5-12% total returns.
