Open-end Fund (Noun)
Meaning
A regulated investment company with a pool of assets that regularly sells and redeems its shares.
Classification
Nouns denoting groupings of people or objects.
Examples
- An open-end fund is a type of investment vehicle where the number of shares outstanding may vary depending on the level of investor interest.
- Investors in an open-end fund typically buy or sell their shares directly from the fund, rather than through a secondary market.
- The key characteristic of an open-end fund is that the fund will issue new shares to meet investor demand and will also redeem existing shares when investors want to sell.
- The net asset value of an open-end fund is calculated at the end of each trading day, and this serves as the basis for pricing investor purchases and redemptions.
- In the United States, open-end funds are one of the most common types of investment company, and they are regulated under the Investment Company Act of 1940.