Background: Stone Ridge Asset Management offers a number of interval funds. Interval funds are not mutual funds. They occupy a middle ground between mutual funds and closed-end funds. They have limited liquidity. There is no secondary market for them. You can't redeem them on demand like a mutual fund. Typically, the fund company hopes or expects but does not promise to make a periodic repurchase offers e.g. every quarter, but they might not make the offer or they might offer to buy only a percentage of your shares. You generally can buy them only through an advisor. They come with tons of disclaimers and warnings. The fact that they are not liquid like a mutual fund makes it possible for them to invest in illiquid assets that mutual funds cannot invest in. The AVRPX, LENDX, and SRRIX (variance, peer-to-peer lending, and reinsurance) interval funds are occasionally discussed in this forum, because of Larry Swedroe's endorsement of them.
The first one is a bitcoin futures fund, BTCNX. It apparently was launched in January, 2020. For those who like this sort of thing, this is the sort of thing they will like. In the words of Forrest Gump, "and that's all I have to say about that."
The second one gives new meaning to the phrase "this fund is not for everyone." OK, I'm joking, but Stone Ridge Longevity Risk Premium Fixed Income Fund 2045 65F is
As you might expect, though, there are forty-two of these funds: Stone Ridge Longevity Risk Premium Fixed Income Fund 2045 65F, 65M, 66F, 66M, and so on up through Stone Ridge Longevity Risk Premium Fixed Income Fund 2045 85F and Stone Ridge Longevity Risk Premium Fixed Income Fund 2045 85M, each being offered only to investors of a specific age and sex. The slicing up is because the price of each fund depends on the buyer's age and sex.Only being offered to investors who are women born on or between January 1, 1955 and December 31, 1955.
If I understand correctly, and I might not--the fund invests in STRIPS. It makes monthly payments amount to $1 per share per year for 25 years, or until the shareholder dies, whichever comes first. That's a level dollar payout. On death, there is a sort of return-of-premium-like feature: a payment is made equal to the initial purchase price less the total amount of distributions that have been made. The funds cost from $12.81 to $20.98 per share, depending on age and sex. Unlike a typical income annuity, the payments stop after 25 years even if the shareholder is still alive, but they note cheerfully "A significant portion of the Fund’s shareholders are not expected to survive through the Fund Liquidation Date." Even if the shareholder survives, the payments might not continue for 25 years because
There is a gigantic disclaimer:If the Fund has insufficient assets to make its monthly distributions before the Fund Liquidation Date, however, the Fund will liquidate early.
The Fund is not an annuity or other type of insurance contract, consequently:
- Distributions provided by the Fund are not guaranteed or otherwise backed by an insurance company or by any third party.
- Therefore, if the Fund is wrong in its assumptions or actuarial estimates or the Fund’s investments lose money, then at any time, you may not receive monthly distributions as described below, and you may lose any or all of your investment that has not already been distributed to you.