Closed-End Funds
Closed-end funds are a type of investment fund that issues a fixed number of shares that are traded on a stock exchange. Unlike open-end funds, which issue new shares to meet investor demand, closed-end funds do not issue new shares. Instead, investors buy and sell shares of the fund on the open market. Closed-end funds are typically managed by professional fund managers who invest in a variety of securities, such as stocks, bonds, and other investments. The fund’s portfolio is managed to meet the fund’s stated investment objectives.
History of Closed-End Funds
Closed-end funds have been around since the late 19th century. The first closed-end fund was the Foreign & Colonial Investment Trust, which was established in 1868. Since then, closed-end funds have become a popular investment vehicle for investors looking for diversification and professional management. Closed-end funds are regulated by the Securities and Exchange Commission (SEC) and must adhere to certain rules and regulations.
Comparison of Open-End and Closed-End Funds
| Fund Type | Shares Issued | Share Price | Redemption |
|---|---|---|---|
| Open-End | Variable | NAV | Yes |
| Closed-End | Fixed | Market Price | No |
Summary
Closed-end funds are a type of investment fund that issues a fixed number of shares that are traded on a stock exchange. Unlike open-end funds, which issue new shares to meet investor demand, closed-end funds do not issue new shares. Instead, investors buy and sell shares of the fund on the open market. Closed-end funds are typically managed by professional fund managers who invest in a variety of securities, such as stocks, bonds, and other investments. For more information about closed-end funds, investors can visit the SEC website or consult a financial advisor.
See Also
- Open-End Funds
- Mutual Funds
- Exchange-Traded Funds (ETFs)
- Index Funds
- Hedge Funds
- Real Estate Investment Trusts (REITs)
- Money Market Funds
- Fixed-Income Funds
- Balanced Funds
- Growth Funds
