Top Performing Interval Funds

May 14, 2024

However beautiful the strategy, you should occasionally look at the results.
Winston Churchill

The interval fund sector has gone through unprecedented growth over the past few years. Yet there has been very little coverage of how these funds are actually performing, until now. In the article we provide a broad overview of interval fund performance, and highlight some of the top performing funds. Our goal is to separate the signal from the noise and see what really works over the long term.

Some key stats on overall interval fund sector performance:

80.2% of interval fund share classes that have reported full year 2023 financials delivered a positive total return.
90.1% of interval fund share classes that have a three year track record have reported overall positive total return
95.7% of interval fund share classes that have a five year track record have reported overall positive total return.

This chart shows average annualized total returns for different interval fund categories.

Interval Fund Tracker’s Premium Plus offering includes access to all the underlying data in this post.

Bluebay Destra International & Event-Driven Credit Fund

BlueBay Destra International & Event-Driven Credit Fund is the top performing interval fund by a wide margin. Its Class I shares (CEDIX) have returned 14.95% annualized over the past 5 years, and 18.09% annualized over the past three years. Since inception in 2018, CEDIX has a total return 12.74% annualized. Class A shares(CEDAX), which launched a few months after the Class I Shares, have delivered a total return of 13.70% annualized.

BlueBay Destra International & Event Driven Credit Fund uses an opportunistic approach to investing in a variety of credit related instruments around the world. CEDAX pays an annualized distribution of 7.45%, and CEDIX pays an annualized distribution of 7.67%.

The Private Shares Fund

The Private Shares Fund created the category of Private Equity/Venture Capital Interval Funds. Many prominent investors have followed with VC strategies. Its Class I Shares(PRIVX) have delivered an 8.5% annualized return since 2019, making it the second best performing fund overall on a 5-year basis. It had an 8% drawdown in 2023, bringing its 3-year record down. However, it is up 3.96% so far in 2024. Since inception in 2014, PRIVX has delivered an annualized return of 8.17%.

Stone Ridge Trust II

Stone Ridge Trust II, also known as Stone Ridge Reinsurance Risk Premium Interval Fund(SRRIX) is designed to capture the reinsurance risk premium by investing in a broad set of reinsurance-related securities. In most years it delivers a moderate single digit return. However, in 2023 SRRIX earned a total return of 44.18%, making it the best performing interval fund for the year. Over the past three years, the total return for SRRIX has been 11.33% annualized. However, it has a fiscal year ending October 31, 2023, and it has not yet reported interim performance.

According to the fund’s annual report:

The Fund’s performance is largely based on the occurrence or non-occurrence of natural or non-natural catastrophe events or other loss events around the world, which impact the performance of reinsurance-related securities. The Fund’s exposures span many different regions and types of events covered. The last few years have seen a high number of medium-sized catastrophe events, and the reinsurance industry has responded by raising premiums and deductibles. Positive performance was a function of these improved terms and conditions, as higher premiums outweighed the impact of any natural catastrophe events that caused losses to the Fund during the fiscal year.

BlueRock Total Income Plus Real Estate Fund

Rising interest rates have been difficult for the real estate sector. Consequently, nearly all real estate interval funds had a negative total return in 2023. However, several real estate interval funds have delivered consistent income and overall total returns over the long term.

BlueRock Total Income Plus Real Estate Fund leads the real estate interval fund category. In spite of a ~12% drawdown in 2023, Class I Shares (TIPWX) had delivered an annualized total return of 7.45% and 6.20% on a 3-year and 5-year basis through the end of the year. TIPWX’s total return is a – 3.89% so far in 2024, but from inception in 2012 through March 31, 2024 it has delivered annual total return of 5.83%. Many investors prefer real estate interval funds to publicly traded REITs, because they deliver a similar level of income with far less volatility. The standard deviation for TIPWX since inception has been 1.84%, compared to a 25% standard deviation for REITs.