Interval funds, which offer limited liquidity and access to private markets, are gaining traction as investors seek alternatives to traditional ETFs and mutual funds. Asset managers like TCW, Blackstone, and Vanguard have launched new interval funds this year, bringing the total to 139 with about $100 billion in assets. 

These funds, which allow redemptions only at set intervals (typically quarterly), enable investments in less liquid assets like private credit. For example, TCW’s new fund focuses 80% on private asset-backed credit, illustrating the shift toward alternative income strategies. 

Meanwhile, attempts to bring private asset exposure to ETFs, such as the PRIV ETF, have struggled due to regulatory concerns over liquidity and naming.

Finsum: Advisors are increasingly allocating client portfolios to interval funds, favoring their higher yields despite reduced liquidity and higher fees.