investment trust that pools the assets of investors and issues a fixed number of shares. In contrast, an open-end fund or a mutual fund that continuously offers new shares to the public or offers to repurchase shares at Net Asset Value. Shares of closed-end funds are traded over-the-counter or on stock exchanges and may trade at a premium or discount from the net asset value per share.
type of fund that has a fixed number of shares usually listed on a major stock exchange. Unlike open-end mutual funds, closed end funds do not stand ready to issue and redeem shares on a continuous basis. They tend to have specialized portfolios of stocks, bonds, convertibles, or combinations thereof, and may be oriented toward income, capital gains, or a combination of these objectives. Examples are the Korea Fund, which specializes in the stocks of Korean firms, and ASA Ltd., which specializes in South African gold mining stocks. Both are listed on the New York Stock Exchange. Because the managers of closed-end funds are perceived to be less responsive to profit opportunities than open-end fund managers, who must attract and retain shareholders, closed-end fund shares often sell at a discount from net asset value.
