Closed-end fund

A closed-end fund is a type of investment company that is registered with and regulated by the Securities and Exchange Commission. The fund’s investments are actively managed, and typically concentrate on investments within a specific industry or region. The key characteristics of a closed-end fund are:

  • It sells a fixed number of shares, after which the shares trade on a secondary exchange.
  • The price of the shares trading on the secondary market will fluctuate based on market demand, so the share price can vary significantly from the net asset value of the fund.
  • The fund is not required to buy back shares from investors upon request.
  • The fund’s portfolio is managed by a registered investment advisor.
  • The fund can invest in securities that are relatively illiquid.