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Ch.2 · Mutual Fund Structure Basics · medium

What is an interval fund?

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EXPLANATION

An interval fund is a hybrid between open-ended and close-ended funds. It allows purchases and redemptions only during specified transaction periods at pre-defined intervals (e.g., monthly or quarterly). Between transaction periods, it behaves like a close-ended scheme.

A.A fund that declares dividends at fixed intervals

B.A fund that allows transactions only during specified transaction periods at pre-defined intervals [✓ Correct]

C.A fund that rebalances its portfolio at fixed intervals

D.A fund that invests in securities maturing at fixed intervals

EXPLANATION

An interval fund is a hybrid between open-ended and close-ended funds. It allows purchases and redemptions only during specified transaction periods at pre-defined intervals (e.g., monthly or quarterly). Between transaction periods, it behaves like a close-ended scheme.

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