What is the difference between a closed-end and an open-end fund?
A closed-end fund has a fixed number of shares outstanding, and is traded in a similar way to stocks. Open-end funds, which are much more common, sell and redeem shares at any time directly to shareholders. Sales and redemption prices for open-end funds are fixed based on the fund’s net asset value (NAV). The more investors purchasing a fund, the higher its net assets, but per share prices will remain the same; on the other hand, since closed-end funds are traded on the market, it can be priced at a premium or discount, depending on demand as well as performance.