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Closed-Ended Funds




Closed-ended funds, like their more populous and popular open-ended cousins, are investment companies set up to own securities portfolios.

But unlike traditional funds, closed-ended funds trade on exchanges, and their prices aren’t directly linked to the underlying value of assets held in the fund.

A closed-end fund sells a fixed number of shares at one time through an initial public offering (IPO), which occurs when a private company puts up its stock for purchase by the public for the first time. See what are IPOs for more information on public company offerings.


Additional Comments:

Closed-ended funds can provide a unique opportunity for value investors.

Unlike open-ended funds, the market price of a closed-ended fund doesn’t necessarily match its net asset value. Because price doesn’t necessarily track value, and because closed-ended funds are less popular to the investing community, their prices tend to lag net asset value. That makes for possible bargains, and indeed, most closed-ended funds trade at a discount to their net asset value.

Related Terms:

No Load Fund
Mutual Fund offered by an open end investment company that imposes no sales charge (load) on ...

Mutual Funds
Mutual funds are the most common type of pooled investment. Funds "slice and dice" many types of ...

Actively Managed Funds
In most actively managed funds, the fund manager makes specific investments with the goal of outperforming ...





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