Open-end Investment Company (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 investment company must buy back its shares at their current net asset value to comply with regulations.
- Mutual funds and exchange-traded funds can both be structured as open-end investment companies with regular redemptions.
- A benefit of investing in an open-end investment company is that the shareholders have control over the number of shares they own.
- Most countries regulate the structure and management of open-end investment companies through a mix of tax and corporate law requirements.
- Shareholders can benefit from liquidity as they are allowed to sell back shares in an open-end investment company.