» Dictionary of Mutual Fund Terms » Closed-end Fund

Closed-end Fund

Closed-end Fund Closed-end funds have a fixed number of outstanding shares.

Closed-end Fund Characteristics

A closed-end fund differs from a mutual fund in that that the letter allows for the purchase of new shares. That's why mutual funds are characterized as open-ended.

Closed-end funds are traded on an exchange and their price is determined by market demand, but after an IPO (the initial public offering of a company's first stock). These characteristics lead to the conclusion that closed-end funds mimic more the behavior of stocks. Another characteristic is that they are tradable below or above their NAV (Net Asset Value).

Alternative Names - closed-end mutual funds, closed end funds

For instance the closed-end fund represented an attractive investment opportunity for Marry for its experienced management team.

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