The SEC defines an Interval Fund as a type of Investment Company that periodically offers to repurchase its shares from shareholders. The fund periodically offers to buy back a stated portion of its shares from shareholders. Shareholders are not required to accept these offers and sell their shares back to the fund. Legally, interval funds are classified as closed-end funds, but they are very different from traditional closed-end funds in that:
1. Their shares typically do not trade on the secondary market.
2. Instead, their shares are subject to periodic repurchase offers by the fund at a price based on Net Asset Value (NAV).
3. They are permitted to offer their shares continuously at a price based on the fund’s Net Asset Value (NAV), which many interval funds do.