{"id":48279,"date":"2017-03-20T10:08:00","date_gmt":"2017-03-20T14:08:00","guid":{"rendered":"https:\/\/prefblog.com\/?p=48279"},"modified":"2025-07-16T10:09:37","modified_gmt":"2025-07-16T14:09:37","slug":"march-20-2017","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=48279","title":{"rendered":"March 20, 2017"},"content":{"rendered":"

There’s a new investment structure testing the waters … interval funds<\/a> are an attempt to bridge the liquidity gap between investors and illiquid underlying investments:<\/p>\n

Most of these portfolios are so-called interval funds, a quirky structure offered through financial advisers that allows investors to buy daily but sell only once per quarter. \u200b<\/p>\n

Fees are stiff, generally running at least 2.5% annually.\u200b
…<\/b>
Such interval funds offer to buy shares back from investors at predetermined dates and amounts \u2014 typically at least 5% of their shares four times a year. The idea is to offer enough liquidity for investors to get some of their money back over time, but not enough for them to yank it all back at one time.
…<\/b>
And how these funds value their shares, in the absence of a public market for much of their assets, is a departure from the traditional techniques of mutual funds.<\/p>\n

These portfolios rely on quarterly valuations by appraisers provided by the property pools they invest in.
…<\/b>
But most of the interval funds are younger; several are too new to have weathered the storm of 2007-2009.<\/p>\n

They use different techniques to bridge the awkward gap between quarterly appraisals on the underlying private properties and daily valuations of the funds\u2019 shares.<\/p>\n

Mr. Kamfar of Bluerock says his fund uses internal models and \u201cdaily observable inputs\u201d to estimate interim values. Bluerock then reviews the daily pricing after actual valuations come in at quarter end. Mr. Kamfar says approximately 90% of the time, any adjustments are no more than one penny per share.<\/p>\n

John Snowden, portfolio manager of the $230 million Resource Real Estate Diversified Income Fund, says the fund takes the forecast of the coming month\u2019s pricing on commercial property as estimated by Green Street Advisors, a research firm, and divides it by the number of days in the month. The resulting number is added or subtracted to the fund\u2019s daily net asset value. The share price is later adjusted as appropriate when actual values become available. Any adjustments rarely exceed a fraction of a percent, says Mr. Snowden.<\/p>\n

Such pricing techniques might hold up fine in a downturn, but we won\u2019t know for certain until one hits.<\/p>\n<\/blockquote>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
HIMIPref™ Preferred Indices
These values reflect the December 2008 revision of the HIMIPref™ Indices<\/strong>
Values are provisional and are finalized monthly<\/td>\n<\/tr>\n
Index<\/td>\nMean
Current
Yield
(at bid)<\/td>\n		Median
YTW<\/td>\n		Median
Average
Trading
Value<\/td>\n		Median
Mod Dur
(YTW)<\/td>\n		Issues<\/td>\nDay’s Perf.<\/td>\nIndex Value<\/td>\n<\/tr>\n
Ratchet<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n-0.3258 %<\/td>\n2,093.3<\/td>\n<\/tr>\n
FixedFloater<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n-0.3258 %<\/td>\n3,841.1<\/td>\n<\/tr>\n
Floater<\/td>\n3.63 %<\/td>\n3.80 %<\/td>\n51,727<\/td>\n17.87<\/td>\n4<\/td>\n-0.3258 %<\/td>\n2,213.6<\/td>\n<\/tr>\n
OpRet<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n-0.2740 %<\/td>\n3,009.1<\/td>\n<\/tr>\n
SplitShare<\/td>\n4.95 %<\/td>\n3.97 %<\/td>\n60,884<\/td>\n0.71<\/td>\n6<\/td>\n-0.2740 %<\/td>\n3,593.5<\/td>\n<\/tr>\n
Interest-Bearing<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n-0.2740 %<\/td>\n2,803.8<\/td>\n<\/tr>\n
Perpetual-Premium<\/td>\n5.34 %<\/td>\n4.60 %<\/td>\n71,937<\/td>\n0.09<\/td>\n20<\/td>\n0.1251 %<\/td>\n2,746.8<\/td>\n<\/tr>\n
Perpetual-Discount<\/td>\n5.16 %<\/td>\n5.19 %<\/td>\n95,114<\/td>\n15.05<\/td>\n16<\/td>\n-0.0291 %<\/td>\n2,924.8<\/td>\n<\/tr>\n
FixedReset<\/td>\n4.41 %<\/td>\n4.11 %<\/td>\n254,504<\/td>\n6.69<\/td>\n94<\/td>\n-0.2309 %<\/td>\n2,339.7<\/td>\n<\/tr>\n
Deemed-Retractible<\/td>\n5.04 %<\/td>\n3.64 %<\/td>\n140,958<\/td>\n0.18<\/td>\n31<\/td>\n-0.0634 %<\/td>\n2,856.4<\/td>\n<\/tr>\n
FloatingReset<\/td>\n2.48 %<\/td>\n3.27 %<\/td>\n50,776<\/td>\n4.59<\/td>\n9<\/td>\n-0.0898 %<\/td>\n2,499.5<\/td>\n<\/tr>\n<\/table>\n\n\n\n\n\n\n\n
Performance Highlights<\/strong><\/td>\n<\/tr>\n
Issue<\/td>\nIndex<\/td>\nChange<\/td>\nNotes<\/td>\n<\/tr>\n
SLF.PR.G<\/td>\nFixedReset<\/td>\n-1.12 %<\/td>\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2025-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 16.71
\nBid-YTW : 8.28 %<\/td>\n<\/tr>\n
GRP.PR.A<\/td>\nSplitShare<\/td>\n-1.08 %<\/td>\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2017-04-19
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.61
\nBid-YTW : -9.44 %<\/td>\n<\/tr>\n
GWO.PR.N<\/td>\nFixedReset<\/td>\n1.20 %<\/td>\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2025-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 16.02
\nBid-YTW : 8.74 %<\/td>\n<\/tr>\n
TRP.PR.C<\/td>\nFixedReset<\/td>\n1.60 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2047-03-20
\nMaturity Price : 15.85
\nEvaluated at bid price : 15.85
\nBid-YTW : 4.21 %<\/td>\n<\/tr>\n<\/table>\n\n\n\n\n\n\n\n\n\n\n
Volume Highlights<\/strong><\/td>\n<\/tr>\n
Issue<\/td>\nIndex<\/td>\nShares
Traded<\/td>\n		Notes<\/td>\n<\/tr>\n
BAM.PF.F<\/td>\nFixedReset<\/td>\n108,383<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2047-03-20
\nMaturity Price : 22.98
\nEvaluated at bid price : 23.85
\nBid-YTW : 4.26 %<\/td>\n<\/tr>\n
RY.PR.I<\/td>\nFixedReset<\/td>\n104,143<\/td>\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2022-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 24.50
\nBid-YTW : 3.80 %<\/td>\n<\/tr>\n
TRP.PR.K<\/td>\nFixedReset<\/td>\n82,873<\/td>\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2022-05-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.78
\nBid-YTW : 4.31 %<\/td>\n<\/tr>\n
MFC.PR.N<\/td>\nFixedReset<\/td>\n52,130<\/td>\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2025-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 21.94
\nBid-YTW : 5.59 %<\/td>\n<\/tr>\n
BMO.PR.R<\/td>\nFloatingReset<\/td>\n51,475<\/td>\nYTW SCENARIO
\nMaturity Type : Hard Maturity
\nMaturity Date\t: 2022-01-31
\nMaturity Price : 25.00
\nEvaluated at bid price : 23.92
\nBid-YTW : 3.08 %<\/td>\n<\/tr>\n
GWO.PR.L<\/td>\nDeemed-Retractible<\/td>\n42,756<\/td>\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2017-04-19
\nMaturity Price : 25.50
\nEvaluated at bid price : 25.77
\nBid-YTW : -9.29 %<\/td>\n<\/tr>\n
There were 37 other index-included issues trading in excess of 10,000 shares.<\/td>\n<\/tr>\n<\/table>\n\n\n\n\n\n\n\n\n\n
Wide Spread Highlights<\/strong><\/td>\n<\/tr>\n
Issue<\/td>\nIndex<\/td>\nQuote Data and Yield Notes<\/td>\n<\/tr>\n
BAM.PR.K<\/td>\nFloater<\/td>\nQuote: 12.33 – 12.64
\nSpot Rate : 0.3100
\nAverage : 0.2000<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2047-03-20
\nMaturity Price : 12.33
\nEvaluated at bid price : 12.33
\nBid-YTW : 3.83 %<\/td>\n<\/tr>\n

BAM.PR.C<\/td>\nFloater<\/td>\nQuote: 12.30 – 12.58
\nSpot Rate : 0.2800
\nAverage : 0.1920<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2047-03-20
\nMaturity Price : 12.30
\nEvaluated at bid price : 12.30
\nBid-YTW : 3.84 %<\/td>\n<\/tr>\n

IGM.PR.B<\/td>\nPerpetual-Premium<\/td>\nQuote: 25.90 – 26.10
\nSpot Rate : 0.2000
\nAverage : 0.1199<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2017-04-19
\nMaturity Price : 25.50
\nEvaluated at bid price : 25.90
\nBid-YTW : -4.15 %<\/td>\n<\/tr>\n

BAM.PR.B<\/td>\nFloater<\/td>\nQuote: 12.43 – 12.71
\nSpot Rate : 0.2800
\nAverage : 0.2099<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2047-03-20
\nMaturity Price : 12.43
\nEvaluated at bid price : 12.43
\nBid-YTW : 3.80 %<\/td>\n<\/tr>\n

GRP.PR.A<\/td>\nSplitShare<\/td>\nQuote: 25.61 – 26.10
\nSpot Rate : 0.4900
\nAverage : 0.4230<\/p>\n

YTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2017-04-19
\nMaturity Price : 25.00
\nEvaluated at bid price : 25.61
\nBid-YTW : -9.44 %<\/td>\n<\/tr>\n

TRP.PR.F<\/td>\nFloatingReset<\/td>\nQuote: 18.63 – 18.84
\nSpot Rate : 0.2100
\nAverage : 0.1433<\/p>\n

YTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2047-03-20
\nMaturity Price : 18.63
\nEvaluated at bid price : 18.63
\nBid-YTW : 3.24 %<\/td>\n<\/tr>\n<\/table>\n","protected":false},"excerpt":{"rendered":"

There’s a new investment structure testing the waters … interval funds are an attempt to bridge the liquidity gap between investors and illiquid underlying investments: Most of these portfolios are so-called interval funds, a quirky …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[15],"tags":[],"class_list":["post-48279","post","type-post","status-publish","format-standard","hentry","category-market-action"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/48279","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=48279"}],"version-history":[{"count":2,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/48279\/revisions"}],"predecessor-version":[{"id":48281,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/48279\/revisions\/48281"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=48279"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=48279"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=48279"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}