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What is a closed end fund?

Closed end fund is a type of investment company whose shares are traded on the open market. Learn about closed end funds and how they can impact your personal investing strategy.

What is a closed-end investment?

A closed-end investment is overseen by an investment or fund manager and organized in the same fashion as a publicly traded company. This type of fund offers a fixed number of shares through an investment company, raising capital through an initial public offering (IPO). After the IPO, shares are listed on an exchange.

What happens after a closed-end Fund IPO?

After a closed-end fund’s IPO, “the supply of shares is typically fixed at that point which is why it is called a “closed-end” fund,” says Jon Ekoniak, managing partner at Bordeaux Wealth Advisors, an investment firm based in Menlo Park, Calif. Mutual funds and ETFs are open-ended funds.

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