Closed-End Fund
A closed end fund refers to a fund that has a fixed amount of shares outstanding. In closed end fund, new shares can hardly be purchased. It is also a collective investment scheme .This fund is more or less similar to stock because they trade on an exchange and the price is also determined by market demand after undergoing an initial IPO process. Closed end fund can also trade below their net asset value or above it.
The Price of the close -end fund shares is determined to an extent by the value of the investments in the fund, premium or discount placed on it by the market. The closed- end fund shares can be bought on secondary market.
They can be purchased from brokers, market makers or other investors against the open ended shares which can be purchased from the fund company. Closed funds are traded on the major global stock exchanges.
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