Interval Funds Become an Easier and More Popular Investor Choice
Channel: ICI Video
Date: 2020-10-01

An ICI-led industry effort to modernize interval fund operations continues to make progress, and fund managers are launching more interval funds. In the October 2, 2020, edition of Focus on Funds, Jeff Naylor, ICI director of operations and distribution, discusses the new recommendations for efficiencies in interval fund operations.

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Transcript

Stephanie Ortbals-Tibbs, ICI director of media relations: The mutual fund industry has been rolling out a roadmap to increase the use of interval funds. Jeff Naylor’s been leading the industry’s work. And on this journey, Jeff, where do we stand? How do things look?

Jeff Naylor, ICI director of operations and distribution: We’re making good progress, Stephanie. The paper that ICI published in July 2019 laid out a roadmap for us to follow in the industry.

Ortbals-Tibbs: And Jeff, as you continue to advance this work for the industry, the next step has been the issuance of a new paper that takes a look at seven different functional areas and how you might continue to progress in those areas.

Naylor: We go much deeper into this one, where we talk about not only the area of interest or those topical functional areas, but we actually dive into looking at what are the various considerations that people need to take when they’re setting up operations or continuing to refine their operation in dealing with those areas.

I’m happy to report that we’ve been able to incorporate new technologies that are emerging in the industry as well as highlight areas where common practices seem to be emerging that help streamline and standardize operations.

Ortbals-Tibbs: Jeff, you mentioned technology, and automation has been a crucial part of that.

Naylor: That’s right. We have a good partnership in our ICI committees with the Depository Trust and [Clearing] Corporation, or DTCC. The DTCC’s role in helping us solve some of our interval fund problems has been very important and continues to be.

Ortbals-Tibbs: Jeff, while the operations experts in the industry smooth the way for interval funds, we do also see them growing in popularity.

Naylor: Even during the pandemic, with all of the market volatility and uncertainty, interval fund assets under management actually grew. And if you look at the last 18 months, you’ll see that a full 15 percent of interval funds that are offered to the marketplace were launched during that time period. And if you look at EDGAR filings, you continue to see [that] interval fund products continue to be filed and prepared for launching to the market. So it’s clear that both shareholders and investment advisers who help them make investment decisions have determined that there is a place for interval funds within a diversified portfolio.