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Fast Growing Fund Structure Offering Investors Increased Access to Alternative Investments

October 2, 2018

Richmond, VA, October 2, 2018

CEF Advisors announces it’s launch of data coverage for the interval closed-end fund structure (iCEF) on CEFData.com. This adds to their offering full and robust data October 2 Image for iCEF Press Release in Blogcoverage of all US listed closed-end funds and Business Development Companies (BDCs) since 2012, including the only known public profile pages for BDCs.

iCEFs have been growing in popularity as an alternative investment vehicle in recent years even though the first interval fund is almost 30 years old and the SEC officially recognized iCEFs in 1992. According to our CEFData.com database there are 42 funds with $29 Billion in assets compared to the $280 billion in 564 listed CEF/BDC fund universe. The SEC has approved 17 iCEFs from January 1, 2017 through August 30, 2018 and 10 CEF/BDC fund sponsors have launched at least one iCEF.

These funds differ from traditional CEFs as they do not trade at market prices on exchanges. Instead, they provide investors liquidity at regular “intervals” most often quarterly at 5%+. This avoids trading at premiums or discounts to net asset value (NAV). According to CEFData.com, as of 9/28/18, the average CEF/BDC has a three-year peak to valley of price vs. NAV of almost 20%, showing the typical variance of CEF pricing over time. This is one potential risk you avoid in the iCEF wrapper. They are accessible with 80% of funds having a $10,000 or lower initial investment.

100% of closed-end fund holdings (traditional or iCEF) can be illiquid; by comparison, 85% of open-end funds holdings are required to be able to be easily liquidated in less than 7 days. One reason iCEFs are gaining popularity is due to increased regulatory and market forces on permanent CEFs, including the 4%+ commission to IPO funds and a current average discount of -6.92%. There has not been a traditionally listed CEF since September 2016 and most iCEFs have a no-load share class.

John Cole Scott, CIO at CEF Advisors shared, “In the same year that the closed-end fund structure turns 150 in London and 125 on the NYSE, it is great to see continued creativity and progress made by Fund Sponsors to increase investment options for non-accredited investors with the protections and oversight of the 1940 Act. We are pleased to add data benchmarking and reporting functionality for our CEFData.com subscribers for all current and future iCEFs.

When discussing how fund sponsors plan to use the fund structure, Kim Flynn at XA Investments shared: “Closed-end funds are a fitting wrapper for less liquid or illiquid alternatives and mark the next generation of alternative funds made available to the individual investor, and highly customizable for investment managers”.

Click Here to view “ABC’s of Interval Funds: An Introduction
to Closed-Ended Interval Funds” to learn more about interval funds.

Click here for a list of the current 42 iCEFs.

About CEF Advisors: Known as “The CEF Experts”. An almost 30 year-old SEC Registered Investment Advisory firm based in Richmond, VA offering customized and risk-optimized separate accounts specializing in CEFs/BDCs for individual investors and investment professionals. Has 30+ CEF/BDC Indexes, a BDC sector fund with fund sponsor partner, SmartTrust and offers various CEF/BDC data and news services to paid subscribers through CEFData.com. Learn more at: http://www.CEFadvisors.com.

 

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