I pitched this idea 15 years ago when I was working, and I've tried it at least once on this board.
My former boss sent me this link https://www.wealthmanagement.com/ret...ol-40-act-fund
Coming Soon: A Mortality Pool in a '40 Act Fund
Stone Ridge is partnering with the Stanford Center on Longevity, as well as New York Life Insurance Co., which has a 30% market share in income annuities.
The description is a closed end mutual fund. This one appears targeted at higher end investors.
The idea is that the assets owned by the people who die are distributed to the people who survive. Unlike a classic tontine, the cash is distributed annually instead of being held for the last survivor.
The article doesn't give the mathematical details, but I'm sure they can be worked out. I don't think it needs to be closed-ended, but I can see the marketing advantage. It could allow any type of investment we normally see in mutual funds.
I'm bothered by the line "Annuities ... come with a lack of liquidity." It seems to me that this fund can only work with very limited liquidity -- otherwise people will bail when they become ill.
This is a transparent way of doing what annuities do behind the curtain. It eliminates the complaint that "when I die, the insurance company keeps the money".