Examining in-demand fund structures
Discover the similarities and differences between closed-end mutual funds, interval funds and exchange-traded funds.
The dynamic nature of the investment industry encourages managers to continually assess products that meet investor preferences. Recent investor trends include the movement toward closed-end mutual funds, interval funds and exchange-traded funds. Learn more about these in-demand fund structures and compare their characteristics.
Closed-end mutual fund: Registered with the SEC, a closed-end fund generally issues a fixed number of shares that are not redeemable from the fund. They have similar compliance testing as open-end funds but are allowed to hold a greater percentage of illiquid securities in their investment portfolios.
Interval fund: A type of registered closed-end fund that does not trade on the secondary market but whose shares may be continuously offered and are subject to periodic repurchase offers by the fund at a price based on net asset value.
Exchange-traded fund: An open-end fund registered under the 1940 and 1933 Acts that requires exemptive relief from various rules. Authorized Participants (AP) direct share activity on an exchange through creations and redemptions. Once the AP receives the ETF shares, the AP is free to sell the ETF shares in the secondary market to individual investors, institutions or market makers in the ETF.
Closed-end mutual fund: May be invested in equities, bonds and other securities with no limit on illiquid securities
Interval fund: Typically alternative strategies, investor assets are pooled into an investment portfolio with no limit on illiquid securities
Exchange-traded fund: Typically represents a basket of securities designed to mirror a specific index (passive) or actively managed portfolio, daily disclosure typically required for portfolio holdings
Closed-end mutual fund: Traded in an open market with prices determined by supply and demand forces, traditionally transacted on an exchange
Interval fund: Subscriptions and redemptions limited to predetermined frequency transacted at NAV
Exchange-traded fund: Daily NAV with intra-day trading at market price
Closed-end mutual fund: Typically taxed as RIC (1099) but could also be taxed as a corporation (1099) or partnership (K-1)
Interval fund: Typically taxed as RIC (1099) but could also be taxed as a corporation (1099) or partnership (K-1)
Exchange-traded fund: Typically taxed as RIC (1099) but could also be taxed as a corporation (1099) or partnership (K-1)
Sample investor markets
Closed-end mutual fund: Retail and institutional investors
Interval fund: Retail and institutional investors or through private offering to accredited investors
Exchange-traded fund: Retail and institutional investors
Whether you’re interested in closed-end mutual funds, ETFs, interval funds or others, visit us at usbank.com/globalfundservices to learn how we can help support your growth.
U.S. Bank Global Fund Services is a wholly owned subsidiary of U.S. Bank, N. A.
U.S. Bank Global Fund Services (Ireland) Limited is registered in Ireland, Company Number 413707. Registered Office at 24 - 26 City Quay, Dublin 2, Ireland. Directors: Linda Gorman, Rose Clear, Brett Meili (USA), Joe Neuberger (USA), Padraic O'Connor, Christine Waldron (USA) U.S. Bank Global Fund Services (Ireland) Limited is regulated by the Central Bank of Ireland.
U.S. Bank Global Fund Services (Guernsey) Limited is licensed under the Protection of Investors Law (Bailiwick of Guernsey), 1987, as amended by the Guernsey Financial Services Commission to conduct controlled investment business in the Bailiwick of Guernsey.
U.S. Bank Global Fund Services (Luxembourg) S.a.r.l. is registered in Luxembourg with RCS number B238278 and Registered Office: Floor 3, K2 Ballade, 4, rue Albert Borschette, L-1246 Luxembourg. U.S. Bank Global Fund Services (Luxembourg) S.a.r.l. is authorised and regulated by the Commission de Surveillance du Secteur Financier.
Investment products and services are:
NOT A DEPOSIT • NOT FDIC INSURED • MAY LOSE VALUE • NOT BANK GUARANTEED •
NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY
U.S. Bank does not guarantee products, services or performance of its affiliates and third-party providers.