Business, Legal & Accounting Glossary
A fund with a fixed number of shares outstanding, and one which does not redeem shares the way a typical mutual fund does. Closed-end funds behave more like stock than open-end funds: closed-end funds issue a fixed number of shares to the public in an initial public offering, after which time shares in the fund are bought and sold on a stock exchange, and they are not obligated to issue new shares or redeem outstanding shares as open-end funds are. The price of a share in a closed-end fund is determined entirely by market demand, so shares can either trade below their net asset value (“at a discount”) or above it (“at a premium”). also called closed-end investment company or publicly-traded fund.
A Closed-End fund is one with a limited number of shares. No new shares are issued after the fund is launched. An investor can purchase shares in a closed-end fund from a broker. The price of a closed-end fund is determined by the premium (or discount) placed on it by the market. ETFs, or exchange-traded funds, make up a subset of closed-end funds.
A closed-end fund is legally known as a closed-end management company.
A closed-end fund issues a fixed number of shares, usually through a one-time public offering, after which timeshares in the closed-end fund are traded on a stock exchange, and not directly from the fund. A closed-end fund differs from a mutual (open-end) fund, which continuously issues new shares. A closed-end fund also differs from a mutual fund in that it may issue senior securities such as preferred stocks or bonds. The price of a share in a closed-end fund is determined entirely by the market and is not directly related to the NAV per share. Shares of a closed-end fund may sell at a discount or premium to the NAV. The process of buying or selling shares of a closed-end fund is identical to the purchase or sale of any other listed stock. Closed-end mutual funds are actively managed.
closed-end investment company
publicly-traded fund
To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.
Definitions for Closed-End Fund are sourced/syndicated and enhanced from:
This glossary post was last updated: 21st November, 2021 | 0 Views.