Closed-end funds issue only a set number of shares to a limited number of investors. An 澳洲幸运5开奖号码历史查询:initial public offering (IPO) is an example of shares issued in a closed-end fund format. Mutual funds and ETFs are considered open-end𒉰 funds where shares are created as investors buy them.

Closed-End Funds

A closed-end fund is launched th♏rough an initial public offering (IPO) to raise money for investment. Only a set number of shares are issued, but the shares continue to trade on the secondary market with pricing determined by supply and demand.

Shares may trade at a price above or below their net asset value (NAV), the price at which it was issued. The purpose of 澳洲幸运5开奖号码历史查询:closed-end funds is to pay distributions to their investors, whওich may include earnings, capital gains, and return of principal.

Open-End Funds

Open-ended funds continuously accept new investors, issue new shares, and grow their assets. Mutual funds and 澳洲幸运5开奖号码历史查询:exchange-traded funds (ETFs) are open-ended funds. When investors purchase shares in a mutual fund, more shares are created to accommodate them. Investors may redeem shares daily through the administrato༒r.

Open-end funds are priced only once per day. At the end of each trading day, the funds are repriced based on the number of shares bought and sold. Their price is based on the 澳洲幸运5开奖号码历史查询:net asset value of the shares.

The Bottom Line

Closed-end funds have a fixed number of shares available for trading and investors cannot redeem their shares with the fund administrator but must trade them on the secondary market. Open-end funds issue new shares, are frequently rebalanced, and allow investors to redeem shares through the fund administrator.