Accessing alternatives with interval funds

Interval funds can help long-term, buy-and-hold investors access alternatives across private and public markets with periodic liquidity.


See if they're right for you

Interval funds offer a unique way to access alternatives


Access private markets

Access alternative investments across public and private markets in a single fund.


Investor-friendly fund structure

Daily pricing, familiar tax reporting, and the potential for periodic liquidity through a structure designed for individual investors.


No eligibility requirements

No income or net worth requirements to invest, unlike some private market alternatives.

Are interval funds right for you?

Learn about the benefits, risks, and unique liquidity considerations of interval funds to determine if they align with your investment objectives.


Interval funds are a specific type of closed-end fund that offers the ability to invest in less liquid assets such as private credit. Unlike traditional open-end mutual funds or ETFs, which allow investors to redeem shares on a daily basis, investors in interval funds can only redeem their shares (or sell them back to the fund) periodically, on a specified redemption schedule.

Accessing alternative investments through an interval fund may offer several potential benefits:

Access to private markets

An interval fund's unique investment structure can offer a more flexible investment strategy. Without the requirement of managing daily redemption requests from investors, interval fund managers are less limited in their investment decisions. This allows them to transact in less-liquid securities, including alternative asset classes, such as private credit, private equity, and private real assets. Access to private markets may enhance returns and diversify a portfolio by generating returns less correlated with traditional investments (like stocks, bonds, and cash).


Help achieve investment objectives
The structure of an interval fund enables exposure to asset classes that can help long-term investors achieve their investment objectives such as the potential to pursue growth, generate income, improve diversification, manage risk and/or balance growth with income.

Requirements
Unlike private alternatives, interval funds do not require investors to satisfy eligibility requirements relating to their income, net worth, or investable assets.


Familiar tax reporting
Like a traditional mutual fund or ETF, investors will receive a Form 1099 from the IRS, a more familiar and simpler tax-reporting process than most private alternatives.

Interval funds have unique liquidity features that influence how and when investors can access their capital.

Periodic liquidity
Interval funds offer periodic liquidity through repurchase offers at specified intervals that are typically quarterly but could be scheduled on an annual, semiannual, or monthly basis.


Repurchase programs
Interval funds are required to provide share repurchase programs that allow you to redeem a portion of your investment. Investors can sell their shares back to the fund only at certain intervals and thresholds, as specified in the fund’s prospectus.

Shares redeemed at NAV, with certain limits
Interval funds can specify the number of outstanding shares they are willing to repurchase during a redemption window. If the repurchase requests from investors exceed the fund's repurchase limit, the amount an investor can sell will be prorated.


Understand each fund's liquidity terms
Before investing in a fund, please review the risk disclosures and liquidity terms, which are described in each fund’s prospectus or other offering documents.

In addition to many of the risks associated with traditional investments (like stocks, bonds, or cash), accessing alternative investments through an interval fund can have unique risks and considerations:

Higher risk
Since interval funds can invest in less-liquid alternative assets, such as private credit, private equity, and real assets, these funds may carry higher levels of risk than traditional investments. However, they may also offer higher return potential.


Complexity
Evaluating interval funds, like other alternative investment opportunities, can be complex. A high degree of investment analysis may be required before investing.


Limited liquidity
Interval fund investors are generally only allowed to sell their shares back to the fund, typically quarterly, in accordance with each fund’s repurchase program. Investors cannot sell them on an exchange as with some other types of funds. There is no guarantee that an investor will be able to sell their shares at a given time, or that they will have their entire redemption request fulfilled.

Fees
Interval funds, like other alternatives, may have fees and fee structures that differ from traditional investments. While interval funds have higher fees than ETFs and mutual funds, the fees are often lower than investments in private alternatives. Common interval fund fees can include management fees, sales loads, performance fees, redemption fees, and operational costs. These fees may result in higher costs for investors. The specific fees and expenses associated with any particular fund can differ. Investors who are considering a specific interval fund should refer to the fund prospectus for more information.


Higher investment minimums
Compared to traditional investments, interval funds tend to have higher investment minimums.


Offered at NAV
Interval funds are always offered at the net asset value, or NAV—the per-share value of a fund's assets minus its liabilities—and can continuously offer shares for purchase. This differs from closed-end funds, which can trade at a discount or premium to NAV.


Fidelity Multi-Strategy Credit Fund (FMSMX)*

For long-term investors seeking income and capital appreciation across public and private credit markets, Fidelity Multi-Strategy Credit Fund is a continuously offered, closed-end interval fund that may provide limited liquidity at specified intervals.


Why Multi-Strategy Credit?
The fund has the flexibility to invest across the credit spectrum, including both public and private credit markets, with a goal of providing a high level of current income and capital appreciation. Learn more

Income

Focuses on providing enhanced income by investing in income-oriented opportunities across public and private credit markets.

Diversification

Invests across the credit spectrum to help mitigate impacts in down markets and seeks to provide lower correlation to traditional asset classes.

Access and exposure

Provides exposure to private credit markets that have historically not been available to a broad set of investors.

View fund details


Download fund prospectus


*Fidelity currently offers one interval fund.

Understanding alternatives

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Learn about alternatives

What you need to know to invest confidently in alternatives—from a breakdown of the basics to ideas on incorporating alts into your investing strategy.


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View frequently asked questions

Get clear answers about alts and how they may help you expand your portfolio beyond stocks, bonds, and cash.


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Frequently asked questions

  • What is an interval fund?

    An interval fund is a specific type of closed-end mutual fund that offers the ability to invest in less-liquid assets such as private credit. Unlike with traditional, open-end mutual funds or ETFs, which allow investors to redeem shares on a daily basis, investors in interval funds can only attempt to redeem their shares—or sell them back to the fund—periodically, on a specified redemption schedule. 

  • What are the potential benefits and risks of the interval fund structure?

    Accessing alternative investments through an interval fund may offer several potential benefits and risks.

    Benefits:

    • Access to public and private markets. An interval fund's unique investment structure can support a more flexible investment strategy across both public and private markets. Without the need to meet daily redemption requests, managers have greater flexibility in their investment decisions, allowing them to make allocations to less-liquid securities, including alternative asset classes such as private credit, private equity, and private real estate. This access can enhance return potential and improve diversification by introducing exposures that may be less correlated with traditional investments, such as stocks, bonds, and cash.
    • Help achieve investment objectives. The structure of an interval fund enables exposure to asset classes that can help long-term investors achieve their investment objectives, such as the potential to pursue growth, generate income, improve diversification, manage risk and/or balance growth with income.
    • Investment requirements. Unlike private alternatives, interval funds do not require investors to satisfy eligibility requirements relating to their income, net worth, or investable assets.
    • Familiar tax reporting. As with a traditional mutual fund or ETF, investors will receive a Form 1099 from the IRS, a more familiar and simpler tax-reporting process than some private alternative funds.
    • Easier to buy. Interval funds can be purchased through a standard trade ticket, avoiding the subscription process often required for private alternative investments.

    Risks:

    • Higher Risk. Since interval funds can invest in less-liquid alternative assets, they may carry higher levels of liquidity risk.
    • Complexity. Evaluating interval funds can be relatively complex. A higher degree of investment analysis may be required before investing.
    • Periodic liquidity. Interval funds offer periodic liquidity through repurchase offers at specified intervals that are typically quarterly but could be scheduled on an annual, semi-annual, or monthly basis. According to the terms of most interval funds, a fund will generally offer to repurchase, or “buy back,” anywhere between 5% and 25% of their outstanding shares. There is no guarantee that an investor will be able to sell their shares at a given time, or that they will have their entire redemption request fulfilled.
    • Fees. Interval funds may have higher fees than mutual funds and ETFs. These fees may result in relatively higher costs for investors.
  • When it comes to liquidity, what do I need to consider with an interval fund?

    Before investing, it is important to consider an interval fund's unique characteristics. As with any investment, please refer to a fund's prospectus for important information on liquidity terms and risk.

    • Investment opportunities. The fund manager pools capital from investors and begins to search for investment opportunities. The manager has the flexibility to look at both liquid and less-liquid options, such as private credit, private equity, and private real estate. This flexibility allows the fund manager to pursue enhanced returns and diversification without the need to manage daily redemption requests.
    • Periodic liquidity. Interval funds offer periodic liquidity through repurchase offers at specified intervals that are typically quarterly but could be scheduled on an annual, semiannual, or monthly basis.
    • Repurchase programs. Interval funds are required to provide share repurchase programs that allow you to redeem a portion of your investment. Investors can sell their shares back to the fund only at certain intervals and thresholds, as specified in the fund's prospectus.
    • Redemption requests. During a repurchase window, you may have the option of selling some or all your shares back to the fund through a redemption request. You are not required to sell or redeem shares. According to the terms of most interval funds, a fund will generally offer to repurchase, or “buy back,” anywhere between 5% and 25% of their outstanding shares. The amount you're able to redeem will depend on the number of shares other investors in the fund wish to redeem. For example, if the fund offers to repurchase 10% of outstanding shares, and each investor submits a redemption request for 20% of their shares, each investor may only be able to redeem half of the shares they've requested. There is no guarantee that an investor will be able to sell all or any of their shares at a given time.
    • Shares redeemed at Net Asset Value (NAV), with certain limits. During a repurchase offer, the fund buys back shares at the NAV on the day of the repurchase. NAV is a measure that calculates the value of a fund. Interval funds can specify a limit to repurchase during any single interval, so if the repurchase requests from investors exceed the repurchase limit, their repurchase amounts will be prorated. There is no guarantee that an investor will be able to sell all or any of their shares at a given time.
  • How can I determine if interval funds are right for me?

    In addition to many of the risks associated with traditional investments—like stocks, bonds, or cash—accessing alternative investments through an interval fund can have unique risks and considerations:

    • Higher risk. Since interval funds can invest in less-liquid, alternative assets, such as private equity, real estate, and debt instruments, these funds may carry higher levels of risk than traditional investments. However, they may also offer higher return potential.
    • Complexity. Evaluating interval funds, like other alternative investment opportunities, can be complex. A high degree of investment analysis may be required before investing.
    • Periodic liquidity. Interval funds offer periodic liquidity through repurchase offers at specified intervals that are typically quarterly but could be scheduled on an annual, semi-annual, or monthly basis. According to the terms of most interval funds, a fund will generally offer to repurchase, or “buy back,” anywhere between 5% and 25% of their outstanding shares. There is no guarantee that an investor will be able to sell their shares at a given time, or that they will have their entire redemption request fulfilled.
    • Fees. Interval funds, like other alternatives, may have fees and fee structures that differ from traditional investments. Interval fund fees can include management fees, sales loads, performance fees, redemption fees, and operational costs. These fees may result in higher costs for investors. The specific fees and expenses associated with any particular fund can differ. Investors who are considering a specific interval fund should refer to the fund prospectus for more information.
    • Higher investment minimums. Compared to traditional investments, interval funds tend to have higher investment minimums. Offered at Net Asset Value (NAV). Interval funds are always offered at the NAV, the per-share value of a fund's assets minus its liabilities, and can continuously offer the purchase of shares. This differs from closed-end funds, which can trade at a discount or premium to NAV.
  • How do interval funds compare to mutual funds and ETFs?

    Mutual funds, ETFs, and interval funds are similar in that they all pool capital to build an investment portfolio. Mutual funds and interval funds are priced once daily at their net asset value (NAV), while ETFs trade throughout the day at market prices. Like traditional mutual funds and ETFs, interval funds are offered continuously, enabling investors to purchase shares whenever the market is open. For purposes of tax reporting, interval funds provide investors with a Form 1099 to report investment income, similar to what you'd receive from mutual funds or ETF.

    However, there are some important differences:

    • Mutual funds and ETFs offer daily liquidity. ETF shares can be bought and sold throughout the trading day, while mutual fund shares are purchased or redeemed at the end-of-day NAV. Interval funds offer more limited liquidity. Investors can redeem only a portion of their of shares during specific periods, often referred to as repurchase windows. There is no guarantee that an investor will be able to sell all or any of their shares at a given time.
    • Mutual funds and ETFs cannot hold more than 15% of their assets in illiquid investments, such as private real estate, private equity, and private credit. Interval funds, by contrast, are not subject to this cap and hold significantly higher allocations, about 30% on average, in illiquid assets, based on Morningstar and SEC data. Source: Morningstar's Guide to Interval Funds, June 2024.
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