What is a Closed-End ETF?
Like a traditional mutual fund, a Closed-End ETF is an investment company that pools the assets of its investors and uses professional managers to invest the money to meet clearly identified objectives, such as current income or capital appreciation. However, unlike a mutual fund, a Closed-End ETF issues a fixed number of shares through an initial public offering, and lists those shares on a national stock exchange such as the New York Stock Exchange (NYSE) or the American Stock Exchange (AMEX). Investors who wish to buy or sell fund shares do not purchase or redeem directly from the fund – rather, they buy or sell fund shares on the stock exchange in a process identical to the purchase or sale of any other listed stock.
