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Vanguard, Wellington Management and Blackstone are partnering to introduce a low-cost interval-fund (IF). The IFs are considered suitable for illiquid assets and the IF wrapper is sort of between ETFs and CEFs. IFs can be bought anytime, but the redemptions are limited to 5% of AUM per quarter; if there are excess redemption requests, those are rejected. There are 307 IFs now with median ER of 3% that includes the cost of leverage (2.18 excluding leverage costs). Their NAVs appear stable because they don’t mark-to-market regularly. Mentioned are CCLFX, CELFX, CADEX, TAKAX, GIREX, TIPRX. https://www.sec.gov/Archives/edgar/data/2065909/000139834425008938/fp0093540-1_n2.htm @lewisbraham in Barron's https://www.barrons.com/articles/interval-funds-big-fees-vanguard-f51eb7fe?refsec=funds&mod=topics_funds
The 5% cap is frequently misrepresented (not by you yogi) in the media and sometimes very clearly it is intentional.
Here is some insight - 5% is the floor, not the ceiling. Managers have discretion to go over - The most important thing to know is that if your redemption request is made in a window where total redemption requests are less than 5% of Fund AUM, you will be fully redeemed (the manager is legally obligated to).
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https://msn.com/en-us/money/savingandinvesting/interval-funds-charge-big-fees-vanguard-is-looking-to-challenge-that/ar-AA1JZFzu#:~:text=Vanguard%20Is%20Looking%20to%20Challenge%20That.,-Story%20by%20Lewis&text=Competition%20on%20Wall%20Street%20is,first%20interval%20fund%20is%20exciting.
Here is some insight
- 5% is the floor, not the ceiling. Managers have discretion to go over
- The most important thing to know is that if your redemption request is made in a window where total redemption requests are less than 5% of Fund AUM, you will be fully redeemed (the manager is legally obligated to).