Evergreen interval funds offer a hybrid structure that combines the benefits of private investments with enhanced liquidity and oversight. These funds provide scheduled repurchase options, allowing investors more control over allocations compared to private vehicles with long lock-up periods and capital calls. 

Eliminating capital calls also avoids the J-curve effect, giving investors flexibility in adjusting their exposure and rebalancing their portfolios. As SEC-regulated entities, interval funds offer heightened transparency and protection, making them attractive alternatives to private funds. 

Studies by Couts and Goncalves quantify the liquidity benefits of these funds, showing that investors value the improved flexibility, especially when interest rates are high. 

Finsum: While focused on private credit, these advantages extend logically to private equity, venture capital, real estate, and infrastructure investments.

Category: Interval Funds

Tags: interval funds, liquidity, alts

A recent study highlights the significant impact of engagement on 401(k) savings, with active participants saving far more than those who aren't involved in their retirement planning. According to Empower's research, engaged individuals contribute 56% more to their retirement accounts, and those actively participating in their plan's resources save even higher amounts. 

These engaged savers are also more likely to fully utilize their employer's match, with 22% of them missing out compared to 48% of disengaged participants. The study also shows that those who consolidate their financial accounts or seek advice tend to save nearly twice as much as their less engaged peers. 

With fewer workers feeling confident about making investment choices, many are turning to financial professionals, which boosts their confidence in securing a comfortable retirement. Despite facing inflation and economic uncertainties, a majority of Americans remain optimistic about their long-term financial future, although short-term financial concerns have shifted their focus from retirement goals to immediate needs.

The US economy surprised expectations in 2024 by maintaining steady growth despite elevated interest rates, a cooling labor market, and political uncertainty tied to the presidential election. It outpaced other Group of Seven nations, with household spending driving much of this resilience. 

Wage growth outstripped inflation, and record household wealth bolstered consumer confidence, even as Americans depleted pandemic-era savings. 

However, challenges loomed: inflation proved stubborn, borrowing costs strained housing and manufacturing, and delinquencies rose among credit-dependent consumers. Labor market signals also hinted at strain, with hiring slowing, job openings shrinking, and unemployment rates ticking up. 

Finsum: While the Federal Reserve began easing rates later in the year, its cautious stance underscores the delicate balance needed to sustain growth amid persistent inflationary pressures.

Direct indexing allows investors to own individual stocks in a customized portfolio, offering tailored market exposure, tax-loss harvesting, and alignment with personal goals. Unlike ETFs, which can only tax-loss harvest during broad market declines, direct indexing captures tax benefits throughout the year. 

Advisors increasingly use it as a core strategy for U.S. equity exposure, leveraging its tax advantages to offset gains from other parts of a client’s portfolio. Technology enables the efficient management of thousands of unique accounts, optimizing trades daily for greater customization and tax efficiency. 

It is also a powerful tool for diversifying concentrated stock positions or preparing for future liquidity events by accumulating tax-loss reserves. 

Finsum: When choosing a provider, factors such as investment performance, tax alpha, and client service are critical to the goals of direct indexing. 

As the Federal Reserve moves toward eventual rate cuts, investors may want to diversify their fixed income strategies, especially if their portfolios are bond-heavy. Options-based strategies offer a compelling alternative, providing income generation without being directly tied to interest rate changes. 

Invesco has introduced three ETFs that combine exposure to key indexes with active option overlays, aiming to deliver income, downside protection, and equity upside potential. These funds include QQA, focusing on the Nasdaq-100, RSPA with its S&P 500 equal-weight approach, and EFAA, which targets international diversification via the MSCI EAFE Index. 

Each fund employs actively managed option strategies, regularly adapting to market conditions to optimize performance and manage volatility. 

Finsum: For investors seeking steady income with professional oversight, these ETFs present an innovative way to supplement fixed income while navigating a dynamic rate environment.