Open-End Fund

A fund that is open to new investors where both new investors and existing shareholders may purchase as many shares as they want. Most mutual funds are open-ended. The fund grows as more money comes in. When investors sell, the number of outstanding shares drops.

Occasionally, open-end funds are closed to new investors when they become too large and difficult to manage. However, current shareholders in the fund can continue to invest money. Conversely, a closed-end fund raises money only once, offers a fixed number of shares, and these shares are traded on exchanges much like stocks.

 

 

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