1) High Expected Yield – most ISA investments compare favorably with other alternative fixed income investments. For example, a recent ICE /BofAML U.S. High Yield Master effective yield was 5.62% (Federal Reserve Bank of St. Louis, 9/27/19).
2) Monthly Cash Flows – edly ISA investments make distributions on the 25th day of every month. Even in early years of an ISA investment (when a student is still in school) edly ISAs pay a monthly return from a reserve account.
3) Diversification – edly investors can make small investments but still benefit from diversification of large pools of ISAs across many students, schools, and fields of study.
4) Tax Reporting – investors do not receive K-1’s as they should not be considered “partners” for tax purposes under the edly investment structure. Instead, edly provides 1099’s to investors.
5) Possible tax advantages – investors should consult their tax advisors to determine if they can enjoy certain tax advantages inherent in this type of investment including deferral of income recognition until payments received with respect to an ISA exceed the amount invested in such ISA.
6) Short Maturity – edly provides a series of optional calls and clean up calls designed to shorten the duration of the investments. Each ISA investment has specific call and maturity features listed. (Note: While an investor’s investment will be terminated at the Maturity Date, there can be no assurance that all of the initial investment will be returned by that date).
7) Investment Reporting & Monitoring: edly makes reporting available to investors monthly on the edly site in investors’ accounts.