Are Evergreen's Funds as good as the sales pitch?

Financial Advisors often encounter confusion between Evergreen and Interval Funds when compared to liquid alternatives. It's essential to note that these funds do not fall under the same category.

The prospectus of these funds predominantly serves the fund manager's interests and may not always offer rights or benefits to the investor. In some instances, interval funds may enforce withdrawal gates, prioritizing the fund's security over investors' concerns.

A notable disparity lies in the substantial variation of up to 5% between an interval or evergreen fund and a drawdown fund, where you're obligated to meet capital calls. This discrepancy reduces investment diversity, especially when considering other safer and less restrictive investments in the same class.

Moreover, a minimum of 5% cash reserve is necessary to fulfill withdrawals, impacting your overall return.

In light of these considerations, it is best to exercise caution and refrain from investing in these funds. Always be sure your financial advisor has read the prospectus, done the appropriate due diligence, and is aware of all the potential issues with the investment. For our clients, we typically do not recommend these type of investments.